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Annual RPIX linked rent increase calculation errors by letting agent
peajayni
Posts: 1 Newbie
Hi,
I just want to check that my understanding is correct. My tenancy agreement states that my rent will increase by "...one and a half times the retail price index (RPIX) published in the month before the increase becomes due."
If this were coming into force in May 2015, my understanding is that the increase would be 1.5*0.9% = 1.35%. However, my letting agents are tying to charge 1.5 * 2.58 = 3.87%. Their value of 2.58 seems to be the raw RPI for April of 258 divided by 100?!
Is my understanding correct in that it should be 1.35%?
Thanks
I just want to check that my understanding is correct. My tenancy agreement states that my rent will increase by "...one and a half times the retail price index (RPIX) published in the month before the increase becomes due."
If this were coming into force in May 2015, my understanding is that the increase would be 1.5*0.9% = 1.35%. However, my letting agents are tying to charge 1.5 * 2.58 = 3.87%. Their value of 2.58 seems to be the raw RPI for April of 258 divided by 100?!
Is my understanding correct in that it should be 1.35%?
Thanks
0
Comments
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Yes, I think you are correct and they are stupid0
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Yes - you are correct. And if you want to refer them to the relevant Office for National statistics website page, it's here: http://www.ons.gov.uk/ons/datasets-and-tables/data-selector.html?cdid=CDKQ&dataset=mm23&table-id=2.20
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They are not stupid, it's the clause that is at fault (If they drafted it then fair enough, they don't understand what they are doing).
The clause says that the rent will increase by 1.5 time the RPI. From OP, the relevant RPI is 258 so the increase should indeed be 387.
The real question is thus 387 what? pounds? pence? percent?
It does not make sense without the unit but their use of the raw RPI is correct according to the clause.
0.9% is not the RPI, it's the annual rate of change of the RPI.0 -
jjlandlord wrote: »0.9% is not the RPI, it's the annual rate of change of the RPI.
You are quite correct0 -
jjlandlord is spot on.
The clause has no units, but does not mention the rate of change of the RPIX. Just RPIX which was 258.0 -
Surely that is a mistake in the drafting of the agreement otherwise you would have exponentially increasing rents?
DarrenXbigman's guide to a happy life.
Eat properly
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Save some money0 -
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