42% of landlords to increase rent but how do you go about it?
Nearly half of landlords will raise their tenant’s rent over the course of 2014 with 26% set to increase it by 3% or more, according to a survey by SpareRoom.co.uk.
However deciding to increase rent is not as simple as some landlords presume as Rob Denman, Head of GW LET, explains:
“According to landlord law there are only two instances when a landlord can legally increase a tenant’s rent. The first is when a tenancy is being renewed. In this instance a new tenancy agreement with details of the new rent is required.
“The second is during a periodic tenancy. However it is important to note firstly that a rent increase can take effect no earlier than 52 weeks after the commencement of the tenancy or a previous rent increase and secondly that the landlord must follow the procedure set out in section 13 of the Housing Act 1988. This procedure involves serving a notice on the tenant proposing the new rent and the date upon which it will take effect.
“There must be a minimum period of time between the date the notice was served and the date the new rent comes into effect. This minimum period is dependent on the nature of the periodic tenancy.”
The remaining 58% of landlords meanwhile have no immediate plans to increase rents, with many choosing to prioritise and reward their existing reliable tenants. Rob Denman continues:
“Landlords planning on increases an existing tenant’s rent are advised to think carefully before implementing the changes. At a time when budgets are already stretched a rent increase could be the proverbial straw that breaks your tenant’s finances, sending them into rent arrears. Alternatively a rent increase could prompt the tenants to move out, leaving you with a potential void period whilst you secure new, unfamiliar tenants.
“As always good communication is important. Speak to your tenants about your plans, perhaps even explaining the decision behind the rent increase. While no tenant is going to welcome paying more, at least by informing them of your intentions you’ll understand their situation better and be able to make a more informed decision.”
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Content correct at time of publication