My tenants want to renew their tenancy. What’s a fair percentage to increase the rent by? Is there a rule of thumb?
I would not look at what is a fair percentage increase but consider what is currently market value for your property and be guided by that.
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Also if you be kind and go on the low side and the RRB comes in and all of a sudden rent controls start happening you may find it difficult
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I would also set the rent at the lower end of the market when renewing. Good tenants deserve a discount in my opinion.
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You don’t need to renew the tenancy to increase the rent. Its generally better for both parties to let it go periodic and agree a new rent informally or with a s13 notice. I’d say 5% - 8% is usually reasonable unless your current rent is well below market price.
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When doing a rent review I make sure the rent I charge is 10% below market rate.
This acts as a reward for existing tenants, and if they did look around they would see it’s a fair rent increase.
That said I also take into consideration, tenants ability to pay.
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Thanks to everyone for your replies. All very helpful.
I always keep my rent below the local market. I was nudged recently by a neighbouring landlord to say I had fallen way behind the local market. That explained why I was always inundated with enquiries the minute I relisted. It was always stressful managing all the viewings and then making the selection.
So I increased the rent last year, but still keeping it on the low end of the local area.
The tenants I now have are very nice, but high maintenance in some of their demands. So I’ve increased the rent in their new lease by 2.5%, well below inflation, which they’re happy with.
Thanks again for your time.
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My landlord has just increased ours by 28%. We have put alot of money and love into the house £240 a month increase normally been £50/75 a month increase its very hard
Is the rent now above market value and have you made a payment yet? If not, you can challenge this increase through a rent tribunal and you won’t be required to pay the increased amount until the tribunal makes a decision. That decision will never be above market value and it might even be below it.
If that 28% rise brings it in line with the market, then the spoonful of sugar that helps this medicine go down is that you have been saving a huge amount in rent up to this point.
How I understand it is although the Renters Rights Act has received Royal Ascent and is to become law, the government has yet to announce a commencement date. Until then existing rules still apply. As it stands now there is no limit on rent increases and a tribunal has the power to increase it even more if the rent is below market value.
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hence my advice to Laura. Have I perhaps missed you making a point?
Under current rules the increase will be backdated so tenant would have to find a lump sum to cover the delayed increase. There is less incentive for tenant to appeal now than when rrb is in place, potentially why ll is increasing it now.
There is also the damage to tenant landlord relationship. Assuming the 28% brings rents to market rates then i wouldn’t be happy to be taken to tribunal given reduced rent was charged for a long period. A lot of landlords are looking to exit the market but dont want to evict good tenants but would see being taken to tribunal as a reason to evict and sell.
If rise is above market rates then i agree to appeal to tribunal.
I have re-read your post. Sorry for any misunderstanding.
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My advice explicitly states that it is given on the basis that the increase is above market rates so…
It’s a tenant’s right to take a LL to tribunal if they perceive the rent increase to be beyond market value. The whole point of a tribunal is to protect Ts from unfair rents being imposed. If a particular LL is using the desire to pursue excessive rent as an excuse to evict then they would do us all a favour if they gave up their occupation anyway.
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