Being a landlord comes with a lot of responsibility, and one task that I had been putting off for ages was increasing my tenant's rent. Once I researched it I found that it was a really simple process and it took me less than an hour to arrange. Here's how you can raise your rent as a landlord in the UK.
Do you need to increase the rent?
Increasing the rent may encourage your tenants to move on, which could end up costing you money whilst you try to find new tenants. Before you increase the rent you need to think about whether it is actually needed. Good reasons to increase the rent including the changing conditions of the market, high maintenance costs and keeping up with mortgage repayments. Increasing the rent because you think the property is worth more or you just want more money in your pocket is not a good reason to increase the rent.
How to actually increase your tenant's rent
If you have decided to increase your tenant's rent, there are a few ways that you can go about doing this.
- Sign a new tenancy agreement at the end of a fixed term of tenancy with the new rental rates. This is really easy to do and one of the most common methods of increasing rent.
- Create a Rent Increase Agreement for increasing rent either one a rolling monthly tenancy or for increasing the rent during the fixed term (as long as you have a clause in the contract that allows for mid-tenancy rent increases). You can download your Section 13 rent increase form for free at the Property Investment Project blog.
- Alternatively you could speak to the tenant to see if you can both mutually agree an increase. Be sure to use the form above so that you can document the increase.
You need to give your tenants at least one month's notice of the increase in rent, and they need to confirm that they accept this increase.
Tenants can reject the increase
Tenants have the right to apply to a tribunal for rent disputes. The tribunal may still decide to increase the rent if they feel that it is lower than comparable properties in the area. As long as your increase is fair and you serve the correct notice of an increase, you should be okay. Once the tenants have paid the higher rent, even just once, this means that they have agreed to the increase. If your tenants challenge the rent increase then you cannot evict them unless you have a legal reason, such as rent arrears.
Being a landlord can be both challenging and rewarding. Here are some of the resources I use to help me to manage my rental property: