Is there a limit to how much a landlord can increase rent?

Caiper

Hello everyone posting on behalf of my sister

She signed a years contract which moved to rolling monthly years ago. Her rent has been at £600 pm through all time. Her landlord has informed her that he wishes to raise the rent to £900. This is still below market rate (she can't see anything else in the borough for under £1050) so is not an unfair amount but still a big jump. Is this allowed? If it makes a difference she receives Universal Credit and lives in England.

Thank you

_Penny_Dreadful

Yes it allowed. Your sister can attempt to negotiate with the landlord. I don’t know how successful that will be since the rent has been below the market rent by quite a bit for some time now. 

Your sister could challenge the rent increase at tribunal but as the new proposed rent is still below the market rent she is highly unlikely to be successful. 

LegallyLandlord

This is a big increase, but most landlords didn’t increase rents in lockdown and if they didn’t increase it last year, then they will have drifted from the market. 

For any landlords reading this, do your best to smooth rental increases. If you have a good renter, then rental increases of 2-3% each year are more palatable than a big increase like this. 

The average rental increase for England in the 12 months to November was 3.9% according to the ONS. This is a blend of in-tenancy increases (which tend to be lower) and new tenancies (which tend to be market).  

Ultimately, landlords are running a business, and with costs going up, if they can’t put up rents, they risk losing money, and will sell up. 

lookstraightahead

50% increase is massive when you're not expecting it. I can see why the landlord needs to increase it, but that's a bit naive of the landlord to expect someone to find that money. Personally I would negotiate but then expect it to go up to that much next time.

diystarter7

lookstraightahead said:

50% increase is massive when you're not expecting it. I can see why the landlord needs to increase it, but that's a bit naive of the landlord to expect someone to find that money. Personally I would negotiate but then expect it to go up to that much next time.

Hi
As a LL I agree with your post
However, they may have valid reasons or pur greed, we don't know

The LL can raise as much as they like and its up to sis to pay or refuse the amount of rise and or make a counteroffer or move etc.  Family  that rents out several places often increases rent around 7/10% is more realistic and sensible.

Good luck


Thanks

diystarter7

LegallyLandlord said:

For any landlords reading this, do your best to smooth rental increases. If you have a good renter, then rental increases of 2-3% each year are more palatable than a big increase like this. 

The average rental increase for England in the 12 months to November was 3.9% according to the ONS. This is a blend of in-tenancy increases (which tend to be lower) and new tenancies (which tend to be market).  

Ultimately, landlords are running a business, and with costs going up, if they can’t put up rents, they risk losing money, and will sell up. 

The 2/3% , not sure which part of the country that is but I'm almost 100% certain that would not be worth while anyone's time/money in London, within M25 due to new contracts agents fees etc therefore I'm not sure if they have made a typo error.

I agree that what the OP's sis LL is seeking is not good practice/reasoanble etc but they must have their reasons

Thanks

propertyrental

Caiper said:

 Is this allowed? 

Depends. Maybe.
What does the tenancy agreement say about rent increases, if anything?
If nothing, has the LL served a S13 Notice?

For more, read

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

Grumpy_chap

Caiper said:

Hello everyone posting on behalf of my sister

She signed a years contract which moved to rolling monthly years ago. Her rent has been at £600 pm through all time. Her landlord has informed her that he wishes to raise the rent to £900. This is still below market rate (she can't see anything else in the borough for under £1050) so is not an unfair amount but still a big jump. Is this allowed? If it makes a difference she receives Universal Credit and lives in England.

Thank you

It is unrealistic for the rent to continue at £600 if the market rent is over £1k.
The offer of rent at £900, while a massive increase, is on-the-face-of-it fair.

How did this gap between rent and market rent reach such a large variance?

We have a property that we let out and the new tenants moved in 2019 at market rent.
They have been good tenants and always paid, plus very few bills or requests for work arising.
Each year, however, the tenants have an excuse as to why there should be no rent increase.
We try to be reasonable as the LL and accepted zero change, but he rent is now drifting some way below market.
Next year, there will have to be some upward movement and it will be more than just one years' worth of change.

theartfullodger

Landlord can REQUEST increase of any amount.   (Tenancy type may change).

Tenant does not have to agree.

Tenant can propose any rent reduction (eg down to £1/month).  Landlord does not have to agree.

SiliconChip

If she doesn't either agree to the proposed increase or successfully negotiate a lower increase then I would think it's very likely that the LL will issue a S21 and relist the property at an even higher figure than the one that has been proposed. And if she is evicted, which she will be if it's all done right, where is she going to find another below market rent property without moving to a lower priced area?

lookstraightahead

Grumpy_chap said:

Caiper said:

Hello everyone posting on behalf of my sister

She signed a years contract which moved to rolling monthly years ago. Her rent has been at £600 pm through all time. Her landlord has informed her that he wishes to raise the rent to £900. This is still below market rate (she can't see anything else in the borough for under £1050) so is not an unfair amount but still a big jump. Is this allowed? If it makes a difference she receives Universal Credit and lives in England.

Thank you

It is unrealistic for the rent to continue at £600 if the market rent is over £1k.
The offer of rent at £900, while a massive increase, is on-the-face-of-it fair.

How did this gap between rent and market rent reach such a large variance?

We have a property that we let out and the new tenants moved in 2019 at market rent.
They have been good tenants and always paid, plus very few bills or requests for work arising.
Each year, however, the tenants have an excuse as to why there should be no rent increase.
We try to be reasonable as the LL and accepted zero change, but he rent is now drifting some way below market.
Next year, there will have to be some upward movement and it will be more than just one years' worth of change.

But a big leap like the op faces could mean they cannot pay, which in turn means that both landlord and tenant suffer.

look at the issues with mortgage rate rises, and that's nowhere near a 50% hike.

it's the way it's being done, not the amount