3% rent increase reasonable?

by Readers Question

14:14 PM, 23rd January 2020
About 2 months ago

3% rent increase reasonable?

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3% rent increase reasonable?

We currently let 3 properties, all of the tenants have been our tenants since we purchased them in early 2017. We haven’t increased the rent since, however we would like to do so this year.

All of the tenants are on a periodic tenancy agreement and the AST has provision for a rent increase –
Section 9) If the Tenant remains as the lawful Tenant of the property for more than 12 months the rent will increase once each year. The first increase being the first rent due date more than 365 days after the commencement date.

We are considering increasing by 3%, would this be reasonable?

I’d appreciate any advise on the process to do this. Research on this forum has pointed to issuing a Form 4, however, this refers to property rental in England and we are in Northern Ireland.

If we were to write to them advising of our intentions and then issue a new AST would this be suitable?
Could we amend the rent increase clause to state that it will increase by 3% annually going forward.

Are there any other implications to consider?

Any advise would be appreciated.

Ann



Comments

Gillian Schifreen

11:06 AM, 25th January 2020
About 2 months ago

Reply to the comment left by Ivan Ratnayake at 24/01/2020 - 00:03
We never increase rents. Our mortgage payments have been pretty static for many years and as you say for the sake of a few quid a month keeping a happy tenant for outweighs that. The longer they stay the bigger shock they get if they start to look for another property. We've had 2 tenants give us notice as they wanted a bigger place but rescinded it within a month having seen the jump in rental prices if they move.

WP

10:11 AM, 27th January 2020
About 2 months ago

Reply to the comment left by Gillian Schifreen at 25/01/2020 - 11:06
I'm in the same situation. At this point if you have a tenant, keep them. Even my rather 'interesting' tenants that I now know are better than the unknown ones they could be replaced with. In our properties where we have self paying tenants, we have a lot staying as they can't afford anywhere bigger so it makes sense for them and us to maintain the status quo.

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