Rent below market rate

Hi, Ive been reading other posts about this but I’m still unsure how to proceed. We always renew the Open Rent AST as preferred by out tenants, rather than going periodic. We havent increased rent in 4 years, the first two years because we were finding our feet as landlords and the rent was reasonably in line with market rates for our area, and the last two years because of the pandemic. It shocked me to see our rent is now £400 a month less than most other 3 bed property in the area being advertised. Maybe these landlords are asking too much. Obviously we dont want to make that jump and risk losing our tenants but we feel we should now regularly increase the rent. We will informally notify them of a rent increase by email in advance of the next AST renewal, but how do we legally go about increasing the monthly rent? Would an increase of £100 a month be reasonable? How frequently can we increase the rent going forward to bring it up to nearer the market rate for our area? Thanks

I would look at it in % terms as £400 below market rent is very different if rent is £800 pm or £4k pm.

There is a difference between newly marketed properties rent for and what the average tenant pays. Personally the discount i offer to market rate depends on how good the tenant is but something like
5% discount for decent tenant- pays rent, doesnt create major issues
10% discount for good tenant - low maintenance requests/ costs, deals with minor issues themselves
15% - excellent tenants - goes above and beyond with dealing with maintenance (assumibg you want tgem too)

There is an issue with recent rental white paper is that you dont want to get locked in with low rent if a good tenant becimes less good as it is likely to become harder to make big increases once that comes into force…

If you are doing new ASTs then tenant signing new one would make it legal, personall i prefer periodic and where you have built good relationship with tenant they are normally happy to swirch.

Why are you concerned not to lose tenants that you are subsidising to the tune of £400 per month? Is it a hard to let property?

Why do you keep renewing the tenancy when its better for you to let it go periodic?


Our tenants keep the place spotless, but we take care of all maintanance issues that arise.

The rent is £1400 a month and we are thinking of emailing them to let them know we intend to increase it to £1500 a month. Would you consider that a reasonable increase after 4 years?


We renew the AST every six months. What is preferable about going periodic? Especially in regards increasing the rent?


Yes, £100 pm sounds reasonable given inflation is where it is.

Periodic gives you more flexibility in the event of problems although you can only increase rent every 12 months so if you want to increase after 6 months you would need a 6 months ast. If you do a new ast you need to reserve all the docs which is a bit of a hassle.

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£100 is reasonable to increase after 4yrs.

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