Rent Increase (Landlord)

[OnthePiste]

Hi I know landlords are pretty unpopular on MN but I rent out one property that I lived in prior to moving in with DH. I have had the same tenant for the last 10 years and he is excellent, keeps it beautifully and pays on time. I would like to think I am a good landlord, any repairs are done immediately and we have replaced the bathroom, recently new fitted wardrobes and just had to pay for a new boiler.

I have been quite lax about rent increases, the last one was 3 years ago. I am happy to have a good tenant and I deal directly with him rather than an agent now so pay no fees. Therefore he has always paid under market value. However, my maintenance charges have gone up and I need to remortgage later this year which will increase. I have taken my eye off rents in the area but see they are through the roof. He currently pays £750 PCM and the going rate is £1000. I really need to put the rent up, I was thinking to £800, would this be unreasonable to have a £50 pcm increase? My tenant works and has a good job but every time I have increased the rent, he moans about it and tries to haggle me down which really irritates me. I have to point out that the rent is much cheaper than it should be each time.

Thoughts please?

I hate greedy landlords. But this seems fair enough to me

I also don't pay market value, but our landlord is a family friend. In 10 years, he has never increased the rent BUT he is not good at doing repairs. We have so many issues that just don't get done. Any improvements have come from our own pockets.

If our landlord was as good as you are, I wouldn't have a problem with an increase of £50. That sounds very reasonable.

7% increase over 3 years seems ok to me. We’ve also recently increased by about that amount after 4 years of no increase. The rent is still below the local housing allowance for the size of property.

An increase of £50 in the circumstances you describe, is 100% reasonable.

It definitely sounds reasonable. They've not had an increase in 3 years and as you say are still paying below market value.
I would give him notice and let him know that from "x" date the rent will be increasing by £50 to £800. He then has time to look around if he wants but doesn't sound like he'll get anything for the same price.

My Partner and I used to rent out a property until last year and we also took a couple hundred below market value and only increased the rent once but we were happy to do this as our tenants were brilliant and that can be hard to come by but it also shouldn't be leaving you out of pocket and £200 below market value is still a good deal

I in similar position but have a few more houses let out. I really hate increasing rent but have actually found tenants seem to prefer a small increase each year eg. £7 rather than a larger jump every 3 or 4 years. I tried both and smaller jumps are way to go. I put it in writing with 2 month's notice at end of each fixed 1 year term and give link to Rightmove for 3 bedroom house within 5 miles. In your case definately give link to rent on Rightmove so tenant can see they still have a bargain. I also point out if I have had a mortgage increase in that year.

This just happened to me . Our landlord could have written your entry! Our rent had not gone up in the whole nine years we have lived here ( i know!) he sent a very lovely text saying he valued us as good tenants and he would understand if we decided to leave but he had costs that had risen and it was unavoidable. We actually gave him £25 more to round it up as the current rent is still well below market value.
You are not being in the slightest unreasonable. I agree with above poster, don’t leave yourself short.
Hope that helps.

I’d also echo need for small annual increases rather than a significant one every few years. Costs have gone up (EICRs, tax changes, mortgage rates, gas checks etc) and you shouldn’t absorb them just because he moans about it. He should be pleased he’s paying considerably less than market rates. £800 seems reasonable - he gets a discount and you don’t have a void. As a landlord I’d rather keep a good tenant on a good deal than ask them to pay full market rent.

I think (and I could be really wrong) that Social Housing rent goes up in April and is set by the Consumer Price Index from the previous September plus 1%.

CPI in September 2021 was 3.1% so if he was in social housing he would have got an increase of £30.75 in April anyway.

Also agree that annual rent increases might be the way to go from now on.

It might help to set the increase as a fixed-term one, so he doesn't think you'll be doing this every year. Another thing to try might be to suggest more than you need/want, then barter down under the condition he, e.g., looks after the property... Perhaps sit down and talk it through in person, in terms of what he can afford or hold fire for now and set a condition that any wage increase is reported to you

Please think twice before the increase – someone renting is generally in a far worse position than someone with a second mortgage (I speak as a landlord charging 1/3 under the going price). This is your business, not the tenant's, and if it's not yielding a profit, consider surrendering it and putting your money into a different place/investment/venture.

I'm in a similar position - a tenant who doesn't keep the property well though from what I see on the inspections (think drawing on the walls, ripped wallpaper etc), although I fix everything reported without delay, and don't scrimp on how it's done. I've actually started paying for a gardener because she'd let the (small) garden get so out of control, so my costs are well up. Reluctantly, I've put my (similarly under market value) up by 50 as well - to recoup the gardener if nothing else.

definitely reasonable - but do keep an eye on current rates.... lovely to keep them a decent bit under if you have a good tenant, but do remember the tiny increases. Do it all in one hit and they scream loudly

I think you’re being fair but of course he is going to haggle, he’s a good tenant so I would just grin and bear it 😊

I would also send him listings of similar properties to show the rent is still very cheap.