Landlord wants to increase rent based on inflation. How can we negotiate the price down?

User274958

Hello all, first time user here.

We have recently received a request from our landlord to increase our rent price. He is asking for an increase of 6% because inflation has been very high recently. He also mentions his suggested increase is less than the current RPI of 14%. Our household is already on a tight budget and an increase of 6% would make things quite difficult for us.

First of all I would like to ask if using RPI as a reference is good practice, or if we can look at other such as CPI or any other ones. I feel it's a bit unfair as well because our salaries have not increased along with inflation.

In case it helps, here's some additional info to give some more context: we have been good tenants and been living there for many years, always paying rent on time and never caused any issues to our landlord or the home itself. Last time the rent was increased was 1 year ago (increased by 4% then). I've done some research and it seems similar houses in our area are being advertised at slightly lower prices (but not that much) than what he is asking for.

What can we do to try and negotiate this rent increase to be a bit lower, or ideally stay the same as it is now? I would also like to understand if from a landlord point of view, is a 6% increase a fair thing to ask?

Thank you all very much in advance.

SprostonGreenHead

To be brutally honest, I think it is fair. 6% is less than any reasonable measure of inflation, and it might be that your landlord is facing an increase in their mortgage costs (as a result of interest rate rises to battle inflation).

All you can reasonably do is negotiate, and perhaps show some of the cheaper comparable properties you're seeing in the area. If they refuse, would it be worth moving to one of these comparable rental properties?

Unfortunately it's a crappy situation all-round, and inevitably landlords in some cases will pass increased costs on to tenants.

_Penny_Dreadful

User274958 said:

Hello all, first time user here.

We have recently received a request from our landlord to increase our rent price. He is asking for an increase of 6% because inflation has been very high recently. He also mentions his suggested increase is less than the current RPI of 14%. Our household is already on a tight budget and an increase of 6% would make things quite difficult for us.

First of all I would like to ask if using RPI as a reference is good practice, or if we can look at other such as CPI or any other ones. I feel it's a bit unfair as well because our salaries have not increased along with inflation.

In case it helps, here's some additional info to give some more context: we have been good tenants and been living there for many years, always paying rent on time and never caused any issues to our landlord or the home itself. Last time the rent was increased was 1 year ago (increased by 4% then). I've done some research and it seems similar houses in our area are being advertised at slightly lower prices (but not that much) than what he is asking for.

What can we do to try and negotiate this rent increase to be a bit lower, or ideally stay the same as it is now? I would also like to understand if from a landlord point of view, is a 6% increase a fair thing to ask?

Thank you all very much in advance.

I'd use the fact that similar properties in the area are being advertised at a slightly lower rent than he is asking for and suggest that slightly lower amount as the new rent.

Rent increases aren't necessarily about fairness and RPI isn't a terrible place for the landlord to start but looking at the market rents for the area would be better in my opinion.  As a landlord I see the value in retaining good tenants, better the devil you know, and would have opted to keep your rent just below market rents to encourage you to stay. 

propertyrental

There are 2 elements to your question

1) Legal. Is the LL allowed to increase the rent, and if so, by how much? This largely depends on the type of tenancy (fixed term? periodic (rolling)? and the wording in the tenancy agreement. Read:

Post 5: Rent increases: when & how can rent be increased?

2) business negotiation. You can always negotiate. A good starting point is to research local rents and compare your current rent, and the new proposed rent, against other local similar properties. 

Your record as a tenant also can help. A good, reliable tenant is a real asset to a LL. Losing/replacing you 
a) costs the LL money (void period with no rent, advertising costs etc)
b) opens the LL to the risk of a new, potentially less reliable, tenant

DullGreyGuy

I would say to make sure you are comparing equivalent properties in the first place. We had this more from the other side of the fence where the letting agent provided links to advertised properties to justify the proposed rent increase but we had a fairly old property (landlords former home, not updated/redecorated since he'd moved out more than a decade ago and even then it wasnt done to a great standard) and they were sending properties that were newly refurbished or had a balcony etc so understandably more expensive than what we were renting. 

dimbo61

The BOE base rate has increased from 0.1% in December 2021 to 3.50% in December 2022 with more rate rises on the way.
Now maybe your LL has no mortgage but other costs  have also gone up.
Your call 

User274958

Thank you all for your help and promptly responses. We will try to negotiate the price with our landlord to match similar priced lettings in our area.

SadieO

SprostonGreenHead said:

it might be that your landlord is facing an increase in their mortgage costs (as a result of interest rate rises to battle inflation).

The issue with this argument is that the rent shouldn't be based on a landlord's mortgage costs. If these have increased it's between the landlord and their lender, not the problem of the tenant. Rents should be based on the market rate for a property of that condition, in that area. Using the logic that the rent should "pay" the mortgage, then will the landlord rent the property out for free (or just a minimal maintance charge) once they've paid off their mortgage, or if they didn't have a mortgage on it to begin with eg if they interited it? Or drop the rent if they remortgage to a better rate? I highly doubt that!

OP I think your best bet is to highlight other properties on the market, and if they really are cheaper then I would even consider moving. You shouldn't suffer a higher than market rent because your landlord's costs have increased. 

Mutton_Geoff

Your landlord is free to ask for any amount of increase, subject to terms of your AST. Any mortgage or other costs are irrelevant. Rents have been cheap whilst costs low but as a business, your landlord could quite rightly be questioning whether money in a 4.5%  interest bearing account is a better prospect than renting these days. Rents must rise to make it a sensible business venture. Of course, it's a lot easier to retain a tenant than find a new one but if the place can be relet at the higher price then there is a long term compounding effect of insisting on the full amount rather than nibbling away at their prospective income.

It's going to be tough for tenants of accidental landlords and those owners that more recently entered the market with high gearing and promises of easy returns.

Sarah1Mitty2

Depending where you are in the country, find another landlord?

https://www.telegraph.co.uk/property/buy-to-let/london-landlords-forced-cut-rents-tenants-priced/

Bowey123

I think what you need to do is to compare similar properties and highlight this to your landlord rather than discussing “fair” increases or how you are struggling to manage.
Just as your landlord’s increasing costs are not your problem, your increasing costs are not your landlord’s problem.
I had a similar issue recently.  I had not increased the rent for about 6 years because of market conditions in the area.  However, when market conditions did improve in my favour and asked the tenant to pay market rent for the property.  She was not happy.  She told me of all of her childcare problems, (single parent, she wanted to be near her mum). Reduced hours etc etc.  I had some of my own personal issues at the time, but this was really nothing she needed to be burdened with.  I needed the extra rent.
She was a good tenant.  But I still needed the extra rent. I did take into account her tenancy record and asked for the market rent less a discount for the fact that she was a good tenant and I didn’t want to lose her.
All that was relevant was market rents in the area, and whether the landlord is willing for you to leave and risk finding another tenant.  Really is as simple as that.