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Original poster

Good tenants has asked for 12.5% rent reduction on renewal

56 replies

QuintessentiallyQS · 27/05/2014 17:43

I dont know what to do and must seriously consider the cost of getting new tenants.

Currently the rent they pay is distributed the following way:

OP posts:

Original poster

QuintessentiallyQS · 27/05/2014 17:45

Not sure how that happened!

Currently the rent they pay is distributed the following way:
50% mortgage
10% council tax
30% tax on rental income

The remaining 10% is maintenance, repairs, insurance, and we honestly dont see any profit on the rental. We often spend more on maintenance, we recently had to buy them a £450 new washing machine.

I honestly dont know what to do because we cant reduce the rent. Not sure how to put it to them, though, as they have never owned property and I dont think they are aware of the costs involved?

OP posts:

Frusso · 27/05/2014 17:48

This reply has been deleted

Message withdrawn at poster's request.

orangepudding · 27/05/2014 17:49

Have prices increased in your area. Maybe they are worried about a large rent increase so are starting the negotiation process.

bumpybecky · 27/05/2014 17:49

tell them that ^

if you spent £450 on a washing machine rather than a cheap £200 job, you're better than any of the landlords I ever rented from

LIZS · 27/05/2014 17:49

why are you paying the council tax ?

NellysKnickers · 27/05/2014 17:49

Just say no. Bit cheeky of them. We have always rented and would never ask for a reduction. Especially after getting a new washing machine.

douchbag · 27/05/2014 17:50

You bought them a washing machine can I have u as a landlord pls x

wafflyversatile · 27/05/2014 17:51

What's in it for you is that at the end of the mortgage you have a house you own outright paid for mostly out of their rent. So it's not really true to say there is no profit, just that it's a long-term investment.

MirandaWest · 27/05/2014 17:52

I'd never ask for a rent reduction and am just glad it doesn't go up. I am puzzled why you are paying the council tax though - I pay the council tax on my house. Not sure why you're paying 30% tax on the rental income either although I don't think there's any need for you to justify what you are charging anyway.

toofarfromcivilisation · 27/05/2014 17:52

Do you mean you are paying their council tax? You shouldn't be! As a letting agent we have this all the time and just say no. Unless you're in a seriously odd area you'd get new tenants straight away....and I'm sure your tenants know that.

exexpat · 27/05/2014 17:53

Is there a reason they have asked for a rent reduction - some problem with the house you aren't able or willing to fix, or some improvement work they have done/are planning to do in lieu? Are rents rising or falling in the market where your house is?

If it's a landlords' market (lots of demand, rising rents etc) you can call their bluff: either they pay the rent you set or they leave. If the market is very quiet and you might face a period of vacancy before you find new tenants (plus agency costs etc) it is probably worth negotiating with them, and maybe settling on a smaller rent reduction.

toofarfromcivilisation · 27/05/2014 17:54

If you're paying your agent 30%, can I be your agent?

RyvitaBerry · 27/05/2014 17:56

Id say no. Sweeten the no by saying you wont put up the rent for at least 12 months?

LIZS · 27/05/2014 17:56

oh and you should only be paying income tax on the income net of maintenance costs, mortgage interest, agency fees etc not the full rent amount.

thesaurusgirl · 27/05/2014 17:59

I rented for years and never once asked for a rent reduction. Most tenants are delighted if their rent doesn't increase annually.

What's behind this request? Rents in London are static because the availability of rentals has increased dramatically in the last year or two, but the upheaval and the cost of moving is surely greater than 12.5% of their rent.

I wonder if your tenant has lost their job and wants you to reduce the rent so it falls within the HB limit.

thesaurusgirl · 27/05/2014 18:01

Also, why are you paying your tenant's council tax?

LillianGish · 27/05/2014 18:02

Why are they asking for a reduction - can they easily find something as nice for that price? Are they long-term tenants who are likely to stay? I think having good reliable tenants who want to stay on is worth a lot especially if you add up the costs of a void for a month or two between tenancies. Have prices gone down in your area - ie might you have to reduce the rent to find a new tenant anyway? I am looking at this from both the pov of a landlord and a tenant. We are currently renting out our property and take all the above into account when choosing a tenant and fixing a price - we'd rather get a bit less rent than have the property empty because a month or two with no rent takes a long time to make up iykwim. We are also about move out of the property we rent in Central London and the agent has told our landlord he is likely to have to drop the price because although house prices are going up rents are falling for this type of property.

Redglitter · 27/05/2014 18:03

Tell them you'll reduce it by 10% but they pay their council tax.

Can't understand why you're paying it. It's not your responsibility

OcadoSubstitutedMyHummus · 27/05/2014 18:03

Why are you paying so much tax? The mortgage interest at least should be tax deductible. Are you not in the UK?

exexpat · 27/05/2014 18:05

I'm wondering if the rented house is not in the UK (poster is Norwegian but living in UK, right? So house may be overseas) so the rules on tax, agents' fees etc may be different.

SquidgyMummy · 27/05/2014 18:09

Yes tax should be on the 50% payable after the mortgage / 40% including council tax. Don't forget you can charge 10% of overall rental income for wear and tear. Also cost of washing machine (capital expenditure) is deductible.

If you have void periods, then that is something to consider. one bedders usually rent really quickly.

YoureBeingASillyBilly · 27/05/2014 18:09

Just say no. Bit cheeky of them. We have always rented and would never ask for a reduction

Not cheeky at all. It's a business arrangement and either party is entitled to try and negotiate the terms at renewal. Would you say it was cheeky of a landlord to put the rent up? Because many do that annually.

specialsubject · 27/05/2014 18:16

it is indeed business. They can ask, you decide if you want to accept.

if this is in the UK your agent is ripping you off.

and yes, you shouldn't pay the council tax - tenants do that.

you are allowed to make a profit, despite the vicious abuse you will get on here for doing so, doubtless from people who would not be happy to work for free.

MaccaPaccaismyNemesis · 27/05/2014 18:18

I'd tell them you can take 10% off the rent, and that from now on they can pay the council tax. Which effectively leaves you evens.

Jeez, I rent and I wouldn't expect a reduction, ever!

Original poster

QuintessentiallyQS · 27/05/2014 18:21

I am sorry, I should have said, the property is in Norway. Landlords pay council tax and water rates for tenants , and we pay 30% tax on rental income. There is no agent.

The area is "landlords market", and rents are notoriously high. We charge less than market rate, in fact what we regard a fair rent for a semi furnished house with all white goods. Prices are going up at the rate of inflation and similar properties are a couple of hundred more per month.

I figured I rather have a quiet family with children, than sharers.

I dont want to lose them. But they may find cheaper properties, like 3 bed flats, rather than a house.

OP posts:

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