UK private landlord advice needed. Rental increase etc

[emkay 10,342]

I’ve not had the best of experiences with UK letting agents. My current 12 month fixed term tenancy agreement expires in May 2023. The current tenant may extend by either another fixed term or monthly rolling agreement. I’ve just asked the letting agency what increase they would recommend. They recommend that I don’t due to looming recession, house price fall, cost of living crisis etc. They also stated that there’s a higher risk of the property remaining unlet for longer. 
 

I've been caught out with this before when a previous letting agent always advised not to increase the rent for nearly 8 years. When I changed to the current agent last year, the rent was increased by 45%. A double edged sword though given the additional DE progressionsvorbehalt tax since 2021.

 

Do any other TT UK landlords intend to increase rental this year? Any other advice from anyone else’s letting agency?

 

Although I intended to keep my UK property for as long as practical, my current circumstances might mean that I sell sooner. I got a valuation in January 2022 prior to a fairly extensive upgrade.  New windows, carpets, decorations etc. The current agency has valued at the same price. Despite, a current drop in prices, I thought that since the start of last year, prices increased significantly. Zoopla.co.uk house price on my property does suggest a steady increase during 2022. Although, their overall valuation is unrealistically high. 

 

Is anyone else considering selling? Any other advice from other agencies?

 

Many thanks in anticipation.

[skadi 76]

I guess it depends partly on where the property is. I have a flat in London which I rent out, the tenants renewed and the rent was increased by what I thought was a lot (total madness imho). Advice from the agent was that in London rents are going up quite substantially currently, but it is likely the increases will reduce later in the year. 

 

I also know somebody who rents a house (not in London) and they also had a decent rent hike with new tenants. Although the house had been renovated in between, this did not account for all the increase. 

 

If I were you, I'd talk to another agency and see what they say. 

[dstanners 1,562]

Given a large increase in rent last year, it seems unlikely that you are far from the market value now. I also increased rent on a property last year, when the tenant changed. I am not going to increase it this year.

 

Agree with @skadi about price changes being area specific, but they are also specific to the type of property. A check on rightmove or zoopla for similar properties in a similar area will give you a quick idea as to whether you are in the right price bracket.

 

A key issue is how the property is currently financed? Do you own it outright or is there a mortgage? If your financing costs have increased, that would be a reason to look to recover that additional cost by rent returns. I own outright, so if I've got a tenant in situ, I don't increase rent. I'm aware that with inflation, that's not the best financial decision, but let's be honest, landlording is money for not really doing very much, so I have neither the need nor compulsion to get the best possible deal. It has also led to good tenants staying put, which is a win. 

[sluzup 271]

We have a property in the UK and my preference has always been to keep good tenants rather than getting more money.  An empty property can lose you money pretty fast.  However as dstanners says, it depends on your financial situation.  Our mortgage is almost paid off, so my main concern is to have enough money for repairs and to cover us if we are without tenants for a while and have to pay, e.g., council tax.

[emkay 10,342]

Thanks so much for all of your advice and opinions. It’s helped me a lot.

My repayment mortgage is minimal in the last few years of term, total remaining balance, about 10% of the house value. On the positive side(ish), the mortgage interest element has increased about 600% since the beginning of 2022 that can be deducted from UK and DE income tax.

 

I guess that retaining my current tenants is wise as their financial status is very good. Far better than that of other applicants last year.  Both with jobs that are unlikely to affect their rent affordability. And, new tenancy marketing and agreements costs around £500-600. Risk too of course of an unlet period. 

 

With regard to possibly wishing to sell, I understand from the agent that if I change the tenancy agreement term to ‘monthly rolling‘, I’d have to give the tenant 4 months notice to leave. I doubt I’d ever have a more urgent need than this.

 

Many thanks again.

[Missysx 129]

You should also check right move for similar rents in the area that your property is located as this will give you a good indication if you are charging the right money.

[travelerworker 116]

Hi

more rent sounds good, good tenants sound better.

I had some many issues living abroad with tenants that one I found good ones I prefer make less money and have peace of mind.

Good luck!

[Gambatte 980]

We've been letting our UK house since moving here ca 10yr ago.

We generally make 12-month contracts, and we're now on our 3rd set of tenants.

On several occasion our letting agents proved themselves very good. Not in favour of anyone, just right. The 10% (plus vat, plus some fees for renewal etc) they charge is money well spent.

Regarding rent increase, so far I always asked, and followed, their suggestion. Most years, if the tenants stay, is 1% up (it was flat during COVID though). Otherwise, if the tenants change, we ask the agent what they think its the right rental market value, they give us a range (so far always been identical to what I concluded myself looking online), and we go for the lowest rent inside the range they suggest.

So far so good.

 

Made many mistakes in live, also financially of course, but so far letting (rather than selling and having a lower mortgage here in Germany) has been a good choice. Of course depends on personal circumstances.

 

[hamsterberlin 10]

On 31.1.2023, 11:26:10, emkay said:

Is anyone else considering selling?

 

I have just sold an older Victorian property in the UK, as it felt like there were too many headwinds. To upgrade it to EPC C would be very expensive and at some point that will hit Landlords before homeowners (Landlordzone is a good place to follow the discussion). The second issue was a licencing scheme was coming, something happening more and more in urban areas. No problem with the logic of providing good quality accommodation in a fair way, but the reality for me would just be more cost and bureaucracy.

 

On the agency front I've used Openrent for many years and dealt with my tenants directly. This has worked very well for both parties because the communication is just so much better when it is direct rather than via a third party.

[kiplette 8,802]

We have left ours as it is for a while.

 

We own it so it's not really a thing.

 

The tenant is poor and we don't want to make his life any harder, and are keen to keep the house occupied.

 

Will look at the links above, thank you hamster - that upgrade thing might need a bit of thought.

[kiplette 8,802]

Question to you UK homeowners.

Homeserve (Landlord plumbing and drainage plus)

British Gas Homecare 4

Any ideas on which is better? I read that BG is crap for customer service - does anyone use anything else, or have a completely different arrangement?