Can I increase rent to market rate?

Pic of rent increase for tenant who won't pay landlord property118

by Readers Question

12:01 AM, 10th July 2023, 3 years ago 20

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Hi all, I hope you’re well, am I right to say that I can increase rent to market rate as long as it’s fair and if the tenant does not contest with the tribunal as the increase is legally binding?

It’s a huge increase as the tenant was paying below market rate from £1000 per month to £1800 per month, is that okay as that is the rate in the local area at the moment?

Thank you,

Maaz

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Tags: increase rent to market rate, notice of rent increase, tenant paying below market rate

Comments

Jim K

Member Since July 2023 - Comments: 179

8:37 AM, 10th July 2023, About 3 years ago

Hi.
I believe it is.
However T must be outside the Assured period of the AST ie periodic – or such a rent increase is allowed in the AST.
It may be worth explaining to T why such an increase is necessary, also .sy remove dome of the inevitable shock they will get if you just send a letter.

IE tell them rent has not increased for X yrs due to covid etc.
If you issue a letter, T by paying agrees rent increase.
If challenged you may need to issue s13 notice.
This can go to a first tier tribunal.
However I understand that so long as new rent is ‘market rate’ for that property they can only support it.
Shelter website – whilst tenant centric has good info.
Hope this helps.

1 Report Comment Reply
Martin Roberts

Member Since November 2016 - Comments: 227

9:49 AM, 10th July 2023, About 3 years ago

Bear in mind the tenant may give notice, or worse, stop paying.

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Richard Thomson

Member Since September 2022 - Comments: 1

9:50 AM, 10th July 2023, About 3 years ago

Not advisable though. You will possibly lose your tenant and have a month with no rent plus improvements that need to be made. All very expensive.
Advice incremental rises over next few years after discussion with tenant.

2 Report Comment Reply
Tuly Read Full Bio

Member Since March 2023 - Comments: 15

9:56 AM, 10th July 2023, About 3 years ago

Yes definitely. You can go up to market rent.

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Julesgflawyer Read Full Bio

Member Since November 2022 - Comments: 120

9:57 AM, 10th July 2023, About 3 years ago

And the Tribunal may decide that mkt rent is less than £1800.

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RoseD

Member Since September 2022 - Comments: 198

10:13 AM, 10th July 2023, About 3 years ago

This has been asked on this forum a few times over the past 6 months so I’d definitely recommend looking back at old feeds.
It’s not just about whether you can do it…which judging by responses here you can. Your current tenants may just agree to this huge hike and job done. Flip side…they probably won’t….and that’s when life becomes more difficult. Your property your choice.

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Simon M

Member Since September 2014 - Comments: 166

10:44 AM, 10th July 2023, About 3 years ago

If your tenant can’t afford it – or if it’s too great a shock, they’ll leave anyway. Think about it from your tenant’s side. If they’re a good long-term tenant, do you want to lose them and incur the extra costs of void, refurbishment and re-letting? You may end up with a difficult tenant. Your tenant will know rents have shot up, so if you’d prefer to keep them, discuss it and phase in increases over time.

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David Smith

Member Since June 2022 - Comments: 111

11:53 AM, 10th July 2023, About 3 years ago

Is there a need to put the rent up to Market level? Especially If the tenant is long standing .

What job do they do and can they afford it?

It seems to me a too big of an jump at once perhaps increases over a few years otherwise your good tenant will be an ex-tenant.

2 Report Comment Reply
Juan Degales

Member Since February 2023 - Comments: 40

12:43 PM, 10th July 2023, About 3 years ago

My letting agent suggests that it may not be worth it. She said that in her experience it triggers numerous requests for repairs,redecorating and other trivial repairs as the tenants hits back.

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JaSam

Member Since March 2022 - Comments: 137

1:42 PM, 10th July 2023, About 3 years ago

Did you not review the rent vs market rate at least once a year?

Have you assessed the average and median rates for what you are offering compared to others?

Are you on a fixed rate mortgage or mortgage free? Remember market rates have increased due to other landlords cost increases, coming off low fixes etc if your cost hasn’t increased then arguably you could be “profiteering”.

Have you worked out your ROI if you are making good ROI why rock the boat.

I suggest you slowly creep up your rent gradually overtime but have an open an honest conversation with your tenant beforehand.

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