reasonable rent increase?

kdf987

im new to the forum so not sure if this is in the right place but i have a bit of a rent problem.my flatmate is also my landlord and we live with one other person. as landlord owns flat the agreed deal was for myself and other flatmate to pay half the monthly mortgage each as rent. this was fine and cheap until last week where i was told the rent would be increasing by a third, to cover the mortgage interest rates increase. however, after some research and speaking to a friend, i can see no way how the mortgage can increase by over 30%? can anyone help me make sense of this please and give some advice as to what to do? i have always paid my rent on time, but occasionally landlord has been late in transferring it to appropriate account.would this have affected it?
thanks

CIS

Its possible that the L/L been suffering previous mortgage increases without raising the rent and has now decided he can't afford to meet the cost without the rent increase which is why its a 30% rise .

diesel9181

hi
how long have you been renting where you are? has the rent ever gone up? are there lots of properties where you are available to rent? has the market where you are maybe gone up quite alot and your landlord wants to reflect this? your landlord may even have switched his mortgage about a bit and reduced the term so it could have gone up quite alot. just a thought

Sammy85_2

Hi,

It all depends on when he took out the mortgage, how long over and what rate he got at the time. Ive run some figures though a mortgage calculator, but its impossible to tell what his rise is without knowing more.

Example:

£100000 mortgage, over 25yrs. Taken out 3 years ago, it was possible to get a rate of 4.9% or there abouts. That would give a monthly repayment of £585.
Assuming the 3 year period has now ended, a rate of around 6-7% is more than likely. Working on 7% the monthly repayments on the orginal amount would be £715. (im afraid i havent got time to work out how much the mortgage amount has decreased by in 3 years - probably not alot though!)

Thats a rise of £130 and equates to around 20% rise by my calculations (please excuse me if thats out, my maths aint great!)



Alot of people who are coming to the end of fixed term periods are feeling the pain right now im afraid.

30% isnt completely inconceiveable if he got a great deal ages ago and now has been shafted with a crap one.
You really have to talk to your landlord as this issue is obviously causing you concern. Perhaps you need to arrange a new agreement. You have been getting it cheap though, perhaps he's realised he needs more to cover costs. Most landlords want more than the mortgage payment!
As i said, talk to him, if not this will only wear at you and cause friction in the house anyway!

hope that helps you.

Generali

kdf987 wrote: »

im new to the forum so not sure if this is in the right place but i have a bit of a rent problem.my flatmate is also my landlord and we live with one other person. as landlord owns flat the agreed deal was for myself and other flatmate to pay half the monthly mortgage each as rent. this was fine and cheap until last week where i was told the rent would be increasing by a third, to cover the mortgage interest rates increase. however, after some research and speaking to a friend, i can see no way how the mortgage can increase by over 30%? can anyone help me make sense of this please and give some advice as to what to do? i have always paid my rent on time, but occasionally landlord has been late in transferring it to appropriate account.would this have affected it?
thanks

The LL can only do this if your contract has ended or if your contract has provision for rent increases (which is unusual).

It is possible that his mortgage has gone up 30%. If he's charging more than other similar places in your area he's going to struggle to pass on that increase in costs though.

kdf987

making money has never been an issue for the landlord as we are all friends so the agreement was just to cover cost of repayment. ive been here for 2 and a half years and rent has gone up once before but only by about £20, the similar size of rise i was expecting when told there would be an increase in rent. i will speak to l/l properly but i just wanted a bit of background info from people who know about this kind of stuff as i have never had a mortgage or anything before.it just seems like a big rise at once and a big chunk out of my student loan as i thought interest rates had only gone up about 7%

thanks for all your help

SquatNow

30% is about right if your landlord got a 2 year fixed rate morgage 2 years ago when interest rates were at their lowest.

His fixed rate would have just run out and he would have switched to the SVR.

If it looks bad for you, think about all those BTL muppets who now find the mortgages on their "portfolio" going up 30%.

Anyway, back to the topic: If you have an agreement in writing to split the mortgage then you have to pay the increased rent. If you have a standard rental contract then he can only increase the rent by a reasonable amount, and you can go to arbitration if you want. Whatever happens you've just learned not to rent from a friend again... whatever happens your friendship is probably over.

Doozergirl

If he has come to the end of a fixed rate then he should be remortgaging to get another one! The new rate won't be as good as the old one, no doubt, but far better than the standard variable rate.

If that is the case, then tell him to see a whole of market mortgage broker and save himself (and you!) some money

mr.broderick

30% of what?