Fair rent increase?

Miss_Samantha

Chrysalis wrote: »

1 - miss samantha, sorry dont like you, screwing over tenants for as much money as possible. All this talk of subsidisation etc is wrong. I think its wrong that renting can cost more than a mortgage and also wrong to expect rental income to cover ALL costs, as remember a landlord gains from cheap credit secured on property as well as rising property prices. Not to mention that mortgage payments go down over time (whilst rents go up.

OK... Sorry I destroyed your dreams of a fairy tale world.

I'm sure you work for free and would always sell anything as cheap as possible because it would be wrong to ask for more money.
If you ever sell your car or anything else, please let me know: I could be interested.

MarkBargain

OP, I think it is nice that you have kept the rent down - it is your tenants' home so feel good about treating someone well rather than grabbing every penny that the market allows.

I would review those extra services. How about meeting the tenants to discuss a new tenancy agreement? One like this is designed with protections for the tenants in mind: https://www.gov.uk/government/publications/model-agreement-for-a-shorthold-assured-tenancy

You could explain the rent has not gone up for years so put it up to £995 to start with, but capping it to inflation (CPI) increases in future. That way you get your increase plus small uplifts each year, and they get some security over knowing their rent won't go up above inflation in future.

AdrianC

boliston wrote: »

What does the agreement actually say regarding the rent increase? - it will be typically rpi+2% on an AST and rpi is quite low right now

And such an RPI clause would typically include the right to hold any increases back if they're not taken straight away. So the relevant RPI figure would be between their move-in date and today. Asking a random inflation calculator what £895 in 2009 money would be today comes back with £1077. So £995 is below RPI.

Chrysalis

Miss_Samantha wrote: »

OK... Sorry I destroyed your dreams of a fairy tale world.

I'm sure you work for free and would always sell anything as cheap as possible because it would be wrong to ask for more money.
If you ever sell your car or anything else, please let me know: I could be interested.

Everything that is wrong with today's world.

Housing should be built to house people, not for financial gain.

For reference, I do not charge as much as possible for services I sell. I also dont charge people more year on year for the sake of it, its closely tied to my costs. Increasing rents when often the main cost (the mortgage) is going down is hardly moral. I think its even worse when there is no mortgage meaning ongoing costs for the owner are minimal.

Mortgages are cheaper than private renting, a lot of the time. But the rental market exists because it tends to be people who either dont have means to get a mortage (lack of secure income etc.) or people who want more flexibility which comes with renting. There is only demand for private rental because of a critical shortage of social properties.

As an example my sister pays less mortgage for her 3 bed house than I pay in rent for my 1 bed flat.

In other european countries, you would be in for one hell of a shock.

No equivalent to section 21
Rents regulated
Long term tenancy agreements the norm (several years in length).

The UK is somewhat an oddity with how favourable it is to landlords, presumably because we have an addiction to house ownership here.

There is a reason why so many people want to let out, its easy money if done right.

Chrysalis

In regards to the suggestion of sticking to CPI on an annual basis?

There is a few problems here.

Tenants who need LHA will quickly be in trouble given LHA rates tend to be going down not up.
Many employers do not give annual wage increases and when they do often below CPI.

In all frequent rent increases are something detached from the real world.

AdrianC

Chrysalis wrote: »

Housing should be built to house people, not for financial gain.

Who do you suggest builds these houses in a not-for-profit way? Not everybody wants to live in social housing, after all.

For reference, I do not charge as much as possible for services I sell. I also dont charge people more year on year for the sake of it, its closely tied to my costs.

I salute your philanthropy, but remind you that it philanthropy is always so much easier when you don't rely on your income in order to house and feed and clothe yourself, as you appear not to.

If, otoh, I misunderstand you and you DO rely on that income, then you ARE doing it for financial gain. It's easy to persuade yourself that that financial gain is somehow different to any other private enterprise when you don't have any employees and you don't have external investors.

Remember, everybody in every building firm needs to be paid a market rate. The other costs of the business are paid at a market rate - everything, from marketing to plant hire to materials to office space. What's left after that goes to paying a market rate to those who've invested in them, and to tax. If the profit exceeds that market rate, then either those investors get a better return - which increases the value of the business, via the share price - or if the accountants are sensible some of that money is retained in the business as reserves to allow it an easier time in harder market conditions.

The UK is somewhat an oddity with how favourable it is to landlords, presumably because we have an addiction to house ownership here.

<scratches head> Am I missing something with the logic there?

Miss_Samantha

Chrysalis wrote: »

There is only demand for private rental because of a critical shortage of social properties.

Yes, like there is only demand for private goods because of the critical shortage of goods from the collective factories.

Cakeguts

Chrysalis wrote: »

Everything that is wrong with today's world.

Housing should be built to house people, not for financial gain.

For reference, I do not charge as much as possible for services I sell. I also dont charge people more year on year for the sake of it, its closely tied to my costs. Increasing rents when often the main cost (the mortgage) is going down is hardly moral. I think its even worse when there is no mortgage meaning ongoing costs for the owner are minimal.

Mortgages are cheaper than private renting, a lot of the time. But the rental market exists because it tends to be people who either dont have means to get a mortage (lack of secure income etc.) or people who want more flexibility which comes with renting. There is only demand for private rental because of a critical shortage of social properties.

As an example my sister pays less mortgage for her 3 bed house than I pay in rent for my 1 bed flat.

In other european countries, you would be in for one hell of a shock.

No equivalent to section 21
Rents regulated
Long term tenancy agreements the norm (several years in length).

The UK is somewhat an oddity with how favourable it is to landlords, presumably because we have an addiction to house ownership here.

There is a reason why so many people want to let out, its easy money if done right.

Your sister is responsible for all the repairs to her 3 bed house for all of the time that she owns it. She also has to pay buildings insurance for all of the time that she owns it. So your sister has extra costs that you don't need to worry about. She will also have money tied up in a property that is not available for her to spend because it is stuck in her house. So no interest from the bank for her on the money that is tied up in her house and before you say that the value will increase, it doesn't always everywhere in the country.

Builders build houses. So what you are suggesting is that anyone who works building houses should work for free and anyone who makes the building materials or sells them should also work for free, otherwise they might be making a profit from building houses. If the builders can't make a profit from building houses they can't buy the land required to build the next lot of houses so presumably land owners should hand over their land for free as well?

I have got no idea why you think that private renting is only needed because there is a shortage of social housing. You obviously live in the South East and think that the housing situation applies to the whole country. It doesn't. There are thriving private rental markets in areas of the country where there isn't a shortage of social housing. Private renting is doing well because it gives people a choice between buying and renting somewhere that isn't social housing. Don't forget that some people are both landlords and tenants.

I wouldn't be in for a shock for renting in European countries because I know how one of them works and it is completely different to the UK. So lets start with your 1 bed flat. In at least one country in Europe when you came to rent it you would get a bathroom and one cupboard with a sink and a tap in the kitchen. You would have to pay for and supply, carpets, curtains, light fittings, fitted kitchen or kitchen furniture. Your rent would increase in line with inflation every 3 years even if inflation was low. The landlord could still get the house back if you didn't pay your rent or if they wanted to sell it.

So compared to the landlord who paid for some of the services and did not increase the rent for 7 years I know that in at least one European country there would have been 2 rent increases and they would not have got any of the services paid for by landlord.

You seem to think that it is fair for you to charge for your services but that everyone else should work for free.

What you don't understand either because you don't know anything about how the rental businesses work is that there are a lot of tradespeople who are getting work from repairing houses that have been damaged by tenants, or the landlords are upgrading them between lets. The high quality rented housing has to be kept up to standard. The landlords pay the tradespeople to do this so I expect you would want the plumbers, electricians, decorators, gardeners etc to work for nothing too?

Somerset

Chrysalis wrote: »

.

As an example my sister pays less mortgage for her 3 bed house than I pay in rent for my 1 bed flat.

So buy a 3 bed house and quit !!!!!ing. You'll be quids in.

MarkBargain

Chrysalis wrote: »

In regards to the suggestion of sticking to CPI on an annual basis?

There is a few problems here.

Tenants who need LHA will quickly be in trouble given LHA rates tend to be going down not up.
Many employers do not give annual wage increases and when they do often below CPI.

In all frequent rent increases are something detached from the real world.

The tenancy agreement I suggested give the option of a cap to the level of CPI, but the landlord is not obliged to charge that much or anything, it is just a maximum. I would hope that a good landlord would listen to tenants' circumstances and not push them into financial trouble with rent hikes.