"RPI" Rent Increase

JohnnyWalker2001

Well they got back to me. Apparently, although they acknowledge the RPI increase is actually 1%, they point to a clause in the contract we signed when we moved in:

Should the Landlord and Tenant agree to continue the tenancy for a further year the rental will be increased to be calculated according to the percentage change in the All Items Retail Price Index between the figures most recently published prior to the beginning of the Tenancy and the figure most recently published prior to the service of the notice but the increase shall be not less than 3% or more than 8% of the existing annual Rent.

A 3% increase every year just seems unrealistic to me. I wonder if we can argue that salaries don't increase at 3% a year for the next time this comes up

Innys1

JohnnyWalker2001 wrote: »

Well they got back to me. Apparently, although they acknowledge the RPI increase is actually 1%, they point to a clause in the contract we signed when we moved in:

Should the Landlord and Tenant agree to continue the tenancy for a further year the rental will be increased to be calculated according to the percentage change in the All Items Retail Price Index between the figures most recently published prior to the beginning of the Tenancy and the figure most recently published prior to the service of the notice but the increase shall be not less than 3% or more than 8% of the existing annual Rent.

A 3% increase every year just seems unrealistic to me. I wonder if we can argue that salaries don't increase at 3% a year for the next time this comes up

Maybe we could all try that one when utility bills next rise, petrol goes up, Council tax increases, train fares go up etc etc.

Pixie5740

JohnnyWalker2001 wrote: »

A 3% increase every year just seems unrealistic to me. I wonder if we can argue that salaries don't increase at 3% a year for the next time this comes up

Unlikely since you have signed a contract saying that any increase will not be less than 3% or greater than 8%.

It's always worth trying to negotiate though.

jjlandlord

thesaint wrote: »

I would expect the guidance notes that the government put on the form only this year are legal.

jjlandlord will be along shortly with links to back up his claim.

Already discussed ad nauseam...

Guidance notes are just for information and are not the law (statute or case law).

https://lettingmate.uk/book/6-section-13-notice

JohnnyWalker2001

Innys1 wrote: »

Maybe we could all try that one when utility bills next rise, petrol goes up, Council tax increases, train fares go up etc etc.

Utility prices go up when the costs obtaining that utility go up. Same goes for petrol. Train fare increases are approved by the government, so people complaining CAN complain and make a difference. Same goes for Council Taxes -- some boroughs don't have Council Tax increases at all.

A rent increase is entirely arbitrary.

Innys1

JohnnyWalker2001 wrote: »

Utility prices go up when the costs obtaining that utility go up. Same goes for petrol. Train fare increases are approved by the government, so people complaining CAN complain and make a difference. Same goes for Council Taxes -- some boroughs don't have Council Tax increases at all.

A rent increase is entirely arbitrary.

Applying your logic, when interest rates eventually go up from 0.5% to 1% you'd happily pay double your current rent.

You've clearly never heard of the law of Supply and Demand - your landlord is educating you.

HappyMJ

Innys1 wrote: »

Applying your logic, when interest rates eventually go up from 0.5% to 1% you'd happily pay double your current rent.

You've clearly never heard of the law of Supply and Demand - your landlord is educating you.

Mortgage interest rates are not 0.5% at the moment though aren't they. A BTL mortgage in the current market is more than likely charging around 5.5% interest. A 0.5% increase would be passed on to the landlord increasing the cost of the mortgage to 6%....a 9% increase on the LL's interest costs which should already be covered by the rent. Many landlord's will attempt to increase rents to ensure that the rent covers the interest but if the market won't pay then they can't pass on those increased costs. A lengthy void can be very costly.

G_M

jjlandlord wrote: »

Guidance notes are just for information and are not the law (statute or case law).

https://lettingmate.uk/book/6-section-13-notice

Thanks for the link.

The High Court ruling in London District Properties Management Ltd v Goolamy [2009] EWHC 1367 (2009) interprets the Act and sets precedent.

Innys1

HappyMJ wrote: »

Mortgage interest rates are not 0.5% at the moment though aren't they. A BTL mortgage in the current market is more than likely charging around 5.5% interest. A 0.5% increase would be passed on to the landlord increasing the cost of the mortgage to 6%....a 9% increase on the LL's interest costs which should already be covered by the rent. Many landlord's will attempt to increase rents to ensure that the rent covers the interest but if the market won't pay then they can't pass on those increased costs. A lengthy void can be very costly.

This is exactly the point I was making. Some people don't seem to understand that they are obliged to pay what others would, irrespective of whether they deem it "fair" or not.

caronoel

You signed up for a minimum increase of 3%.

And your question is?????