Should you Increase the Rent?
Thu 20 Jun 2019
The Ins and Outs of Rental Increases
The latest figures from the Office of National Statistics, indicated that rents in the private rented sector in the UK, increased by 1.3% in the 12 months to May 2019. This is an increase of 1.2% in the previous month.
Is there a pressure on landlords to increase rents, following the tenant fee ban? Well, it’s too early to draw any solid conclusions from the limited data available since this introduction at the beginning of June. However, at a time when landlords are faced with having some rental costs passed to them by some estate agents, it seems a logical and perhaps prudent suggestion that they ensure rents stay at market rates.
When Should you Increase Rent?
It’s important to strike a balance keeping a good tenant and making sure your property keeps up with market rates and stays profitable. We advise the following to try and achieve this stability:
Keep any rent increases small and regular
A tenant is not likely to leave because of a £25 per month increase once a year, but you may risk them moving on if you ask for £100 more per month after 2 to 3 years of stability. This is easily achieved at renewal stage by asking your letting agent to draw up a tenancy agreement with the new agreed rent within it. Alternatively, a section 13 notice can be used if the tenancy is in a periodic status.
Keep on top of repairs
A happy tenant with a well-maintained property is unlikely to want to leave. You can also offer a sweetener for any proposed rent increases e.g. replacing any aging appliances for newer models. You will probably get a new washing machine with 2-3 years’ warranty which would be small price to pay for keeping a tenant happy with a necessary rent increase.
Give a generous notice period
If you are planning to renew the tenancy for a fixed term then you should give 2-3 months’ notice of the rent increase; don’t spring it on the tenants a couple of weeks before the current end date! Give tenants enough time to accept and plan for the increase and to budget accordingly.
Don’t be greedy
Listen to the advice of experienced local professionals and be fair to your tenants. Remember, your tenants could appeal a rent increase.
Be prepared to justify the increase in rent
This will be the responsibility of your letting’s agent, who will of course ensure that they have a range of locally comparable properties in order to do this.
If you would like to discuss reviewing and increasing the rent for your property then please contact Michelle Mullins or Thomas Miller on firstname.lastname@example.org