Putting up tenants rent

Eyesparky

brit1234 wrote: »

Sorry but is it my imagination that rents have fallen the last couple of years? Also interest rates have been slashed to 0.5% to reduce mortgage payments which should flow through to renting. With that in mind it does sound a tad greedy. Unless you need the extra capital to pay off your mortgage to get a better LTV with falling house prices ahead, rather than pocket the extra rent money with the lower mortgage payments.

Mostly it is your imagination. Some areas have seen marginal rent decreases with many areas seeing rent increases. It is simply a matter of supply and demand in the area in question. The OP did explain that the property is in a high demand area where comparable properties are renting for higher rates. From the tone of the OP they seem very reasonable and will likely come to some sort of compromise between current rent and market rent in order to keep the tenant happy.

In terms of interest rates being at 0.5% this would indeed be a bonus to the landlord if the banks had actually passed any of the decreases onto Buy to Let mortgage rates. They have not and margins are actually wider in this market segment for the banks. Anyway, I don't think the OP mentioned if he has a mortgage or not on the property. The only governing factor is supply and demand. If the OP had a mortgage and the market rent came no where near paying the interest on the loan I doubt you would be crying out for them to raise his rents to cover the shortfall. Supply and demand would govern the market price to the loss of the landlord.

franklee

adg1 wrote: »

As a rule of thumb, the last published Retail Price Index figures (google it for the UK) are generall used which normally fall somewhere between 3 and 8%.

These aren't normal times, RPI has been negative recently (e.g. RPI has been negative since March with recent figures being -1.3% in August and -1.4% in September) so allegedly we are in a time of deflation - falling prices

Eyesparky wrote: »

It is simply a matter of supply and demand in the area in question.

Supply has been huge in many areas as people who can't sell are putting their places up for rent. Rents where I am have been falling such that having stayed put I'm now paying top end with a rent that hasn't changed for ages. Any mention of a rent increase and I'll not be amused.

Eyesparky wrote: »

The OP did explain that the property is in a high demand area where comparable properties are renting for higher rates.

As said by others the OP needs to be careful not to confuse asking rents with achieved rents. With the oversupply many tenants are negotiating a discount off the asking rent. I was chatting to an agent the other day and she mentioned a property that had gone for 825pcm. I was not happy as it had been advertised at several figures over 900pcm and if I'd realised there was such a discount to be had I'd have gone for it myself! One thing the OP should look for is how quickly properties are let.

Eyesparky wrote: »

In terms of interest rates being at 0.5% this would indeed be a bonus to the landlord if the banks had actually passed any of the decreases onto Buy to Let mortgage rates. They have not and margins are actually wider in this market segment for the banks.

Surely that would depend on which deal the landlord was on. If you look on Singing Pig and 4walls/tribes you will see landlords who are on trackers or who have revered to the lenders SVR are on rates from near zero to 2-3%. For new loans taken out I would agree the rates will be higher but existing landlords can just sit tight and enjoy the low rates and undercut newbie landlords so as to make sure their property is occupied. The older landlords used to say a good tenant is worth 10%, makes sense when you think that a months void would wipe out the rent increase and new tenant is an unknown risk.

ManicMum

Thanks for that. I asked tenant for their thoughts on the matter and they said no worries. So we put it up to mutually agreed amount.

Yeah, I have had all that before - people making out you are something you're not. I had a now ex-friend who said 'we can't all have 2 houses can we'. Interestingly, her husband is a layabout who treats state benefits like a savings account. After a couple of months he chucks his job in, 'coz he's paid into the system'. Yeah, right. Of course, it isn't fair that they can't buy anything - nothing to do with their total lack of motivation or self respect. No one gave me a penny and that's the truth. I have worked and my husband has worked 12 days in every 14, 12 hour shifts. That's how you get 2 houses.

Ttfn!