AIBU to put tenants rent up?

[HarpoBoy]

As part of my Buy to Let portfolio, I have a flat in Clapham that I rent out for £1,850 pcm. Fixed term interest only mortgage of approx £600 until the end of 2026.

Long standing and good tenants, but I know the main tenant works for a major accounting firm who has just given their staff a 9% pay rise. He is quite senior, so can afford the rent.

The rent is up for renewal at the year end. I usually put it up £50 or so.

EA reckons the local market has gone bananas and I should put it up at least £250 this year.

AIBU to put it up by £150 to take it to £2k a month? Should I put it up more or less?

You are on the wind up surely OP?

Genuine question - why ever shouldn’t she?

Another genuine question. If any other small business owner came and said the going rate for their product was increasing, and they themselves were facing increased costs of business and living (because landlords are actual people and don’t get special energy prices) would you all be so nasty?

I haven’t put my rents up, because I’m pretty sure my tenants are struggling. I could evict them and get different ones and increase the rent. But I let to them during covid when it got me out of a hole, so that seems unfair. Even though I’m struggling, too (yes, really).

The reason I’m asking is because I would like to be a good landlord. But it seems in many people’s view, this isn’t actually possible. In which case, I may as well put the rents up and not struggle, if you think I’m morally bankrupt anyway.

The thing is, the context is different with this.

The landlord isn't putting the rent up in line with inflation or lack of profit; they are making a profit and the increase is higher than inflation. If they were operating at a loss, it would be understandable.

The landlord is very clear that they are upping the rent because they are aware that the tenant has had a payrise.

It is not the same as a small business owner charging an extra 50p for a product in order to boost their dwindling profit margins. It's just not the same.

Why shouldn’t people ask about rent increases on Mumsnet, I mean? I’d missed the sex, though. I mean people post about all sort of ghastly or delicate stuff in here, so why is rent taboo?

I take it you're being deliberately obtuse. There's plenty of explanations on this thread about why this is a ridiculous post. Read them, you might learn something.

Sure Jan

I have read them. In this situation I wouldn’t put the rent up. But I don’t know what other landlords would do. I don’t know any! So it doesn’t seem unreasonable to ask.

You’re already making profits of £1,200 while paying off your mortgage, so in the current climate I’m not sure how you could feel comfortable putting their rent up at all. This post makes all landlords look greedy. It’s frankly none of your business what your tenant earns and should play no factor into what rent you charge them. You say this is a good tenant - be a good landlord in return.

Who among us would NOT maximise our income if we could?!

A few other posters have said this, and I also have not increase rent on my house (temporarily live abroad).

Reasons are a) that the tenants are good and bad tenants can cost a lot of money and b) I have been so lucky so far with money that it feels wrong to rinse any last drop of profit from something that is an essential for people. It’s like price gouging on water, and feels morally wrong compared to upping prices for discretionary purchases.

If you have good tenants then personally I wouldn't put it up much and risk annoying them.
The cost of having to re-let, void periods, potentially getting a bad tenant that you can't evict is not worth a hundred quid a month extra.

What you know or think the tenant earns should not be a factor.

yes if he takes a salary cut will you reduce rent?

We live in a free market. We have taxed Landlords to the hilt since 2015 - little wonder so many responsible landlords are now increasing the rent.

yes, you are the victim here 😆

My point exactly. All the people saying OP is being greedy, are not thinking about:

1. the OP needs to put money away each month to eventually repay the capital and
2. the cost of maintenance is going through the roof so if that increases, so must rent.

Someone who at last realises that landlords are a business like any other and not a charity. I wonder if the people above who are shouting 'greedy' would go to the local cafe' who's putting prices up because ingredients and rates are going up, would say those cafe' owners are being greedy.

And I agree. But the moment you mention landlord, you are instantly a pariah, rent increases or not. I don’t understand why landlords are automatically so much worse than any other investor or profitable-business owner.

definitely increase it, especially with expected interest rate raises. if you don't, you're hurting other landlords.

btw why only £150 if the EA says £250?

btw you're service charges and maintenance are definitely increasing. london flat prices are flat and if these tenants want a fixed housing cost, they should buy. renting always commands a premium and you really need to raise the rent as much as you can.

I wonder if the people above who are shouting 'greedy' would go to the local cafe' who's putting prices up because ingredients and rates are going up, would say those cafe' owners are being greedy

Yeah, because choosing to spend a few pence more to buy a cup of coffee and a slice of cake is definitely exactly the same as needing to spend £100s more to keep a roof over your head. Excellent analogy, well done.

Landlords are not a charity, they can do what the F they like with the rent, and the tenant can walk if not pleased, there are going to be tons of flats for rent when this recession really gets rolling anyway.

You run the risk of losing a good tenant. Then if he goes your flat could stay empty for months.

Do you know why he has stayed in the flat so long?

I ask because I spent 4 years as a tenant in one particular flat. Each year I did consider leaving for somewhere nicer, but what kept me where I was was knowing that I was getting a good deal. If the landlord had turned around and upped the price to what I saw as no longer a good deal, I would probably have looked elsewhere.

You could easily find that if you up it to market value, he might decide to see what else the market has to offer. And good tenants are still quite hard to find, which could make replacing him very difficult.

Unless your costs have gone up, you're being greedy.

Try and stretch your thinking process a little: everything is in proportion. Landlords' costs will go up by hundreds of pounds. From service charges, to maintenance bills, to insurance, to certificates, etc. But if you've never been one maybe that's why you don't get it.