Can I index link rents into my tenancy agreements?
8:34 AM, 16th May 2022, 4 years ago
72
Categories:
Hi all, I have just been talking to a fellow landlord and in the discussion, the question and idea came up can we index link the rent into an AST contract?
The next question is if this indexing clause was possible in the contract would you still have to serve a rent increase notice to the tenant and what would be the best option to link it to eg. Retail Price Index (RPI) or Consumer Price Index (CPI) or any other?
I would appreciate any comments or alternative ideas.
Many thanks
Chris
Comments
Have Your Say
Every day, landlords who want to influence policy and share real-world experience add their voice here. Your perspective helps keep the debate balanced.
Not a member yet? Join In Seconds
Login with
or
Previous Article
'Rent To Rent' Millionaires In The UK
Member Since September 2018 - Comments: 3538 - Articles: 5
5:06 PM, 16th May 2022, About 4 years ago
Reply to the comment left by Beaver at 16/05/2022 – 16:58
https://www.gov.uk/private-renting
Member Since September 2018 - Comments: 3538 - Articles: 5
5:07 PM, 16th May 2022, About 4 years ago
https://www.gov.uk/residential-property-tribunal-decisions?keywords=assured+shorthold+tenancy
Member Since May 2018 - Comments: 2025
5:15 PM, 16th May 2022, About 4 years ago
Thanks for the links. So I can’t see the bit that says “…[fair and realistic] which means in line with average local rents”.
Member Since August 2015 - Comments: 226
6:04 PM, 16th May 2022, About 4 years ago
The reference is very useful. But an appropriately drafted AST would avoid the hassle of tribunal applications and having to fight your tenant.
Member Since September 2018 - Comments: 3538 - Articles: 5
6:05 PM, 16th May 2022, About 4 years ago
Reply to the comment left by Beaver at 16/05/2022 – 17:15
https://www.gov.uk/private-renting
Under Heading Rent Increases
under heading General rules around rent increases
bullet point 2 – the rent increase must be fair and realistic, which means in line with average local rents
Member Since May 2018 - Comments: 2025
6:11 PM, 16th May 2022, About 4 years ago
Reply to the comment left by DSR at 16/05/2022 – 18:05
OK thanks :-).
So under present government guidelines, if the Bank of England raised interest rates to the point that they are not sustainable your only option would be to end the tenancy because the guidelines don’t allow you to do anything else. I.e. either the tenant *agrees* to the increased rent *or* you end the tenancy at the end of the current period.
Member Since January 2018 - Comments: 42
7:38 PM, 16th May 2022, About 4 years ago
Reply to the comment left by at 16/05/2022 – 10:38
That’s the point the question is making. If the tenant says no to the increase the only way would be a sec 8 but to get to 2 months arrears will take years I think reading between the lines there is a lot of landlords that use a agent so probably not full time landlords
Member Since January 2018 - Comments: 42
12:07 AM, 17th May 2022, About 4 years ago
Reply to the comment left by DSR at 16/05/2022 – 16:55
It says if not previously agreed I’m not talking about changing existing tenancies but moving forward with new tenants so if new tenants sign agreement then this would be the mechanism for the increase as in the contract
Member Since September 2018 - Comments: 3538 - Articles: 5
10:36 AM, 17th May 2022, About 4 years ago
Reply to the comment left by chris at 17/05/2022 – 00:07
I take the ‘not previously agreed’ to mean that you have not already agreed the rent increase amount with the existing tenant.
Member Since January 2018 - Comments: 42
10:56 AM, 17th May 2022, About 4 years ago
Reply to the comment left by DSR at 17/05/2022 – 10:36
No it means you have not got a contractual agreement on how the rent is to be increased in your tenancy agreement ie if it’s says will increase annually buy consumer price index then that is the only mechanism you can use to increase rent I’m not saying you should but some landlords with large portfolios asked me this question