Increased service charge because of gas prices

Landlord Discussion
1

The service charge in my building has gone up £140pcm because there’s communal heating/hot water that isn’t protected by OFGEM.

What should I be doing in terms of passing this on to my tenant?

Background is that she moved in during the huge crash in the rental market in London last year and hammered me on the rent to the tune of £300, leaving me effectively subsidising her rent.
The market is now the strongest it’s ever been and I’d probably be able to get another £400/500pcm if I kicked her out and found a new tenant (tenancy agreement is coming to an end next month).

I had planned to raise the rent £100 to start to move towards the original asking price but now I’ve been hit with this extra bill that £100 doesn’t even cover, never mind me getting back into profit on my property.

She’s a good tenant and I’d like to keep her but I also don’t want to be £500/month out of pocket! What would you do? What’s a reasonable amount to ask her to pay and agree on as a rent increase?
Thanks for sharing your thoughts!

2

In your circumstances, I would probably raise it by the £300 that you originally discounted it. Leave it to her to decide if she wants to stay. Give her plenty of notice of this.

You don’t need to “renew” the tenancy by the way. It will become rolling periodic on largely the same terms, which is better for you. You increase the rent with a s13 notice in this case.

Longer term, you might want to consider whether this property is a good financial prospect if the service charge can fluctuate so wildly.

1 Like
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Thanks David. Service charge has gone up because of the gas prices (communal heating and hot water). I’m sure not only the profitability but also the value of my property is now taking a nose dive