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

saajan_12

A 6 % increase sounds pretty reasonable, at less than half of RPI. Mortgage rates have increased, repairs costs have inflated, etc, so a fairly priced property last year should see an increase this year. However really the % increase is academic and also influenced by whether the property was cheap / expensive last year. 
Really, the pertinent thing is comparable current market rents in your area. That's the alternative you could get elsewhere if you don't agree. Any small differences are hard to factor in, as to get a £10 lower rent elsewhere, you'd have to suffer the cost of moving. To get a £10 higher rent from another tenant, the LL would have to suffer the cost of eviction / void / reletting. 

Slinky

Mortgage costs may have gone up, repair costs may have gone up but has the landlord actually done any repairs?

LegallyLandlord

The most recent ONS data for England shows that on average rents went up by 3.9% https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/indexofprivatehousingrentalprices/november2022

6% is a big increase when it’s not a new tenancy. There’s also signs that rents are now slowing down in London, which will feed through. I think 4% would be more reasonable. 

doodling

Hi,

LegallyLandlord said:

The most recent ONS data for England shows that on average rents went up by 3.9% https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/indexofprivatehousingrentalprices/november2022

6% is a big increase when it’s not a new tenancy. There’s also signs that rents are now slowing down in London, which will feed through. I think 4% would be more reasonable. 

And, to play devil's advocate, I think that 20% is reasonable.  What you or I think is reasonable doesn't really matter however.

What matters is how the proposed new rent compares with equivalent properties in the local area.  If the proposed rent is higher then it makes sense for the OP to point out that out and, if the landlord doesn't agree then to move to one of those properties.

If the proposed rent is still a good deal then the OPs argument is basically " I want you to be nice to me" which might work or might just wind the landlord up depending on which side of the bed they got out of that morning.

SprostonGreenHead

SadieO said:

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!

I'm not sure what you mean by "shouldn't"? Any landlord is going to charge a rent based on both market pricing (in order to be competitive enough to find tenants) *and* (if they have a mortgage) the cost of their mortgage. When mortgage rates increase, buy-to-let lending costs increase and likely, some rents will follow. This will push up market pricing generally. You can say it's "not the problem of the tenant", but it is if and when this increased cost is passed onto them and in some cases it will be. In this particular case, "inflation" may be the reason, or it may be the excuse.

If the landlord doesn't have a mortgage on the property then it gives them a competitive advantage in their pricing should they wish to take it, or they push their prices up alongside market pricing and make more profit (although a 6% increase in a world of >10% inflation obviously doesn't do that).

sevenhills

LegallyLandlord said:

6% is a big increase when it’s not a new tenancy. There’s also signs that rents are now slowing down in London, which will feed through. I think 4% would be more reasonable. 

As some others have said, I think 6% is a fair increase.
What job does the OP do? If they don't work, benefits and pensions have increased with inflation.
RPI inflation is 14% and that measure of inflation is used by the government when it increases train fares, excise duty  and also student loans.

nyermen

Plenty of points already made here - the only thing I'd add is the irony that when inflation was 0.5% and BoE rate was similar, that "following the market price" was what landlords wanted rather than linked to their costs.  Now that something else has changed, they want to use that.

Feels like a housing "triple lock"...

MobileSaver

SadieO said:

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).

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.

What an odd thing to say, who are you to assert what a landlord should or should not base their prices on? Which successful business do you run where you don't set your prices based on your costs?

What do you think market rates in that area are based on, at least in part? Various landlord's mortgage costs perhaps?

If supermarkets have to pay more for their goods then is that a problem solely between them and their supplier and they should never pass on the increased costs to the customer? As bizarre assertions go, this is pretty high up on the list!

MobileSaver

nyermen said:

the irony that when inflation was 0.5% and BoE rate was similar, that "following the market price" was what landlords wanted rather than linked to their costs.  Now that something else has changed, they want to use that.

It's not ironic though, "market price" is pretty much always linked to costs anyway so nothing has changed.

GibbsRule_No3.

The Government have said councils with social housing cannot raise those rents above 7%.  Some might be below but they cannot go above the 7%.