Landlord wants to increase rent: market hasn’t

[milkchoccie]

Hi there,

We are on an AST for 12 months. Landlord asked us if we would like to renew. They say that they have reviewed the local market and proposed a 5% increase. Where we are in London, things are quiet, and rents haven’t gone up.

Just this morning, a very similar property to the one we rent has come up for £1,850. It is furnished, but ours is unfurnished.

We currently pay £1,850 but the landlord wants to up it to £1,950.

Is it inadvisable to ask the landlord how he came to the proposed increase? And perhaps send them a link to the other property to ‘show’ that rents have not increased?

That sounds a very reasonable thing to do. He'll say 5% is what the market has risen by (he might well be right) but yours might have been a bit overpriced you start with. Showing him a similar place nearby is a good idea - I can't see that negotiating based on some evidence is a bad thing.

Bottom line is: would you be prepared to give notice and move? Obviously the other place will have long gone by then, and from what I can tell London rentals are still in massive short supply and often end up in bidding wars.

Yes, by all means negotiate. If he/she insists that they still want to increase, will you move somewhere else? How likely is he/she to find another tenant is the area is quiet?

I’ve noticed the rental market is quiet here too (edge of London). It usually moves super quickly in the summer months.

It's reasonable to go back and say you think the current rate is still appropriate for the property - personally I would bother trying to argue rents are not increasing, just stick to the line that £1850 is right for the flat.

The link to the furnished one strengthens your pov so include that and mention that it includes furnishings.

We definitely want to stay, but £1200 is a decent chunk of money. I don’t to pi$$ the landlord off!

Then it may be a question of weighing up how much you don't want to pay the extra ££ vs how much you don't want to move.

When did the landlord put this proposal forward? I'm wondering if they are basing it on the recent Ons data that shows rent across the UK grew 5.1% last month.

Rent increases

In all likelihood your LL has a mortgage on your home, whose interest rate has changed.

The other flat may not be mortgaged.

Maybe, who knows, but it's one single rental market. The correct market rent does not depend on the landlord's personal financial arrangements.

Grab a pdf of that full advert in case it gets deleted. It's rare, but it does happen.

Would just like to add there should be no price difference between furnished or unfurnished. A lot are offered either or, and there's never a reduction offered if no furniture is needed.

Good luck.

Thank you for the tips. I've saved the properties.

Interesting point about furnished/unfurnished. We've always calculated about 100pm difference, especially as this flat came without white goods. Which is really uncommon for central.

Landlord essentially replied “f off” and claimed the property is already underpriced 😅

sigh

The landlord is entitled to increase the rent regardless of their own circumstances (or yours). They could be rolling in it for all the relevance it has. They want more, they don't have to justify why. You can agree, negotiate or leave.

Thank you @mondaytosunday

I wouldn't piss my LL off if I wanted to stay.

I am a LL and my rent is below market rent. Agent wanted to increase but know my tenants used money for their business this year so I said no increase to give them breathing space as I am still on low rate.Will increase next year though by £200-£250 and it will still be below market rent by £100-£150. I like my tenants and they like me. We respect each other.

But will need to increase because it will still be below market rent and to ensure the rent meets the mortgage rent ratio set by the bank. Because of the mortgage rent ration, if they can't pay the 200-250, I will be prepared to get new tenants, although I don't want to. I cannot mortgage my property out of the market by not increasing rent.

I mean if I was taking the piss and suggesting a rent not representative of the market, then fair enough. But there are multiple properties available for 1850. Sure there are some at 1950 but they include white goods, are in better condition, or are on slightly nicer streets. The landlord said they didn’t know why some properties were undervalued… which shows it is a matter of opinion!

You aren't taking the piss in trying to negotiate. Your landlord doesn't seem to understand market dynamics.
However, do you want to vote with your feet by leaving or pay more for the ease of staying put? That's a choice for you to make depending on personal factors.

I’ve always been told by agents that it does increase cost. It makes sense to, not only do they have to replace more goods but the tenant has less outlay.

Usually the undervalued ones have been LL for a long time and just haven't moved with the times by increasing as fast as everyone else

@milkchoccie my comment was more on the established relationship with your LL- it is worth ££. Not necessarily just ££ on either side. For example if I had a good landlord who attended to things ASAP as I do and as my previous LL did way back when I rented, I would value that over an extra £100 or just because someone else who I don't know is charging £100 less. Obviously if you cannot afford that £100 your consideration is purely affordability/ money, so there would be no question of your moving on, but purely looking at market rent (by all means have a look) to determine whether to stay or go may not always be the wisest thing.

You haven't said how your LL is and whether you are happy living there.

Yes, definitely. We own a lot of very heavy furniture, and live in a mansion block without lifts. So would require us to pay for a couple of people to help us move. It's not about the money, but obviously we would like to save some!
We think our next move will be to something bigger.

Sounds like you are in a pretty similar situation to us @wimblewo

@milkchoccie understood. I really thought you were living your life(or other PP were commenting on this) merely looking at an extra £100 when you live comfortably.

Good luck with it. And it goes back to: by all means negotiate, especially if LL is being a typical LL. However, I personally would not piss off my LL in the name of negotiating unless I knew I wanted to leave. Goodwill is more important to me. LL can easily decide to get rid of you or not treat you above and beyond because he can- so keeping a cordial relationship is worth it.

For example, I expected my self-employed (electricians so needing to go out) tenants to not pay throughout the pandemic (or miss some payments) and I made money available to support that, but they paid every single month. That goes a long way hence they are still on way below market rent. That's gratitude.

My other wealthy tenant pissed off to his home country as it was easy for him to do leaving me out of pocket. I soldiered on. Lo and behold, he contacted me out of the blue in distress as when he returned his new landlord gave him a week to vacate because of financial problem (bank was taking the property), lost his properties and fled to his home country from where he was now contacting me after a few years enquiring about my gorgeous flat as he realised I was a stable LL ( this was before the cost of living crisis hit). I had the pleasure, in a nice way, to tell him I had wonderful tenants and they are not moving any time soon.