Rent increase during assured shorthold tenancy?

Rent increase during assured shorthold tenancy?

0:01 AM, 20th June 2023, About 9 months ago 4

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Hello, like thousands of others, the monthly interest payments on my one and only rental property have more than doubled since this time last year, and regrettably, I feel I now need to pass some of this cost on to my tenants via a rent increase. They are now paying well below the market rate for comparable properties in the area.

However, it’s unclear to me 15 months into a 24-month AST, whether I can actually do this? In some places I’ve read no, absolutely not, until it lapses into a periodic tenancy. In other places I’ve read yes, but the tenant must be in agreement. If that’s true, I’m slightly baffled as to why any tenant would agree to a rent increase if they didn’t have to. How would it be in their interest to agree to a rent increase? The only thing I can think of is to say I may need to sell up if they don’t agree, but that is not true – at least not yet – so it feels dishonest and manipulative.

I also have a good relationship with my tenants, so I don’t want to jeopardise that by attempting to do something I ultimately cannot do and look like I’m trying to pull a fast one.

I’d be really grateful for advice on this. Can I increase the rent and how should I go about it?

Thanks,

Helen


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Comments

Neil Patterson

9:05 AM, 20th June 2023, About 9 months ago

Dear Helen,

I am assuming you mean a 2-year fixed term?

During a fixed term the tenant has to agree to the increase.

Also if you have a mortgage you need to check the lender is happy for a fixed term longer than a year as it affects their security.

SimonR

9:39 AM, 20th June 2023, About 9 months ago

All depends on what the tenancy agreement says about rent increases. Mine allows for an increase every year however my Landlord tends to do it by way of market comparison

RoseD

10:55 AM, 20th June 2023, About 9 months ago

So to be clear....you not making as much profit as you was and only feel the need to increase rent because your profit not so good (altho not bad enough to sell). Time then to consult tenancy agreement and hope that something has been included in line with rental increases. If not...you going to have a straight forward chat with your tenant about your situation.

Chris Rattew

11:24 AM, 20th June 2023, About 9 months ago

It is clear that in agreeing to the fixed term that both parties agree to the terms. Tenants sometimes agree to longer terms to guarantee prices, just as I set up 3-year contracts to buy gas and electricity in 2021. If this is not the intention, then this should be clear in the tenancy agreement. We offer fixed-term bills-inclusive contracts for up to 18 months, for which there is a strong demand. The increases at the end of the period are generally in line with wage inflation or a bit below, but the agreement says that this is not a guarantee, because circumstances can change.

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