Rent increase – your thoughts on this idea please

Rent increase – your thoughts on this idea please

7:54 AM, 21st May 2013, About 11 years ago 5

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Rent increase - your thoughts on this idea pleaseI normally only increase the rent when I have tenants move out of the property and new tenants move in. However, over the last few years I have noticed tenants remaining longer and longer.

I have a tenant that is now running behind with the rent and the rent is quite low for the style of house. Because the rent is always behind this creates more work with collecting the rent. On the good side they keep the house and garden in good condition.

I was wondering what is the notice period for increasing the rent and what if the tenant does not pay the increase but keeps paying the old rent. Do you have to reissue the DPS paperwork and who has to pay for this.

I was considering putting the rent up say £50 more than I require and offer a £50 discount if the rent is paid on time. Do you think this would help. A little bit like the discount you get with paying the gas and electric on time.

Any suggestions would be handy.



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Mark Alexander - Founder of Property118

8:00 AM, 21st May 2013, About 11 years ago

Hi Daz

In principle I like your idea as discounts are far easier to impose than fines when it comes to law.

Tessa Shepperson of Landlord law wrote a great article for us entitled "How to increase rent the proper way" here >>>

Remember that if you create a new tenancy agreement you will need to issue new prescribed information. Presumably you are using the DPS Custodial scheme as their insured scheme has only recently become available? This being the case, the rules of that scheme are far easier to comply with in terms of AST renewals and of course it will not cost you anything other than your time to produce the paperwork.

How do you propose to deal with the discount? Will this be a side letter between you and your tenant or do you plan to incorporate a condition in the AST?

10:57 AM, 21st May 2013, About 11 years ago

Hi mark

Thanks for your reply. as for the discount i was thinking of marking up the AST contract rent at £50 above what is required then in brackets clearly writing the discount. I would hope any new tenant would accept this and I'm not sure I want a tenant who is looking not to pay the rent on time anyway.


Yvette Newbury

23:01 PM, 21st May 2013, About 11 years ago

This sounds a bit's not of course, but I find tenants tend to be a bit wary of any "schemes" even if you explain how it benefits them. I used to only put the rent up when tenants moved out and hit the same problem as you a few years ago. I therefore now do put the rent up by very small amounts for tenants who stay, merely for inflation. This way rents are still lower than for a new tenant coming in but do keep up a bit with local rents. To date, I have not had a tenant move out due to the small increases, in fact they have appreciated them. If you did have a tenant who said they had to move out due to the small increase you can always reverse your decision and keep it the same for that year, but explain that the following year there will need to be a catch up. You do want to make sure your tenants are comfortably affording the rent, otherwise you may be looking at a problem further down the line. Hope this helps.

9:23 AM, 22nd May 2013, About 11 years ago

Hi Yvette

Thanks for your reply. I like to keep the rent reasonably like you say and can do that as I do not have to pay agency fees. For tenants that always pay and pay on time I will carry on. But when a tenant starts to fall behind there is additional time sorting out late payments etc I feel the rent should be increased and if they move out I will then look for a better tenant.

My experience tells me when a tenant falls behind they then struggle to catch up and end up leaving in debt. So a small increase insures against this as well.



21:31 PM, 22nd May 2013, About 11 years ago

Set the rent at about LHA rate for the family providing that is fair to you and them. If they fall behind both of you have a safeguard.
I would use either an existing contractual entitlement to raise the rent or use a S13 but ask them to endorse their consent upon service of the notice. Of course you negotiate the increase before the S13 notice or contractual increase.

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