UK Landlord Forum / Life

Apologies if this is already covered, did try the search facility and couldn't find anything. Google is a minefield as you get at least a dozen different answers to the same question.

Basically I fell into becoming a landlord by accident after taking a property in part exchange when I couldn't sell my house. I have rented it out for the last 20 years, set in line with the Local Housing Allocation rates and my DSS tenant's housing benefit has been paid directly to me. But the LHA rates are now totally out of touch with modern rents (a rise of £6 a week over the last five years!) and as her children are now moving on she has been paying the £17.50 a week shortfall between her 2-bed entitlement and the 3-bed rate she used to claim.

In Lancashire LHA for a 3-bed property is just £530 (paid every 28 days which equates to around £575 per calender month). For a three bed semi with drive and front and back garden I would probably be looking at around £700 upwards in the private sector.

I am not looking to skyrocket the rent but have been a soft touch for too long. I have read different guidelines ranging from 3 to  10% but the Govt website doesn't give any definitive figure and says it must be "fair and realistic"and in line with local property. Even at 10 per cent it will be way below and I have suggested she apply for Discretionary Housing Payments which the council can pay towards the discrepancy between LHA  and market rent.

She is on a short term assured tenancy which has rolled on to a periodic month-by-month basis. Any advise most appreciated, thanks

PRS is PRS and not linked to LHA as far as I was aware. If you put the rent up will the tenant be able to afford it? If not, they'll just go into arrears. Maybe have a conversation and then serve notice, then rent out for FMV.

LHA rates being out of touch with modern rents is an expected 'trap' that you fall into when taking this route (even if you didn't consider it very much at the time). That's just a fact.

In exchange it seems like you have had 20 years of rent being paid in-full and on-time - no excuses, no change of Tenants, no voids, no bad payers, no excuses, no subterfuge.

Always think on what you have. The grass is not always greener.

If you want to raise the rent - I think you would do better looking at Inflation rates... current if you want to... rather than some document saying - "fair and realistic" and suggesting - "3% to 10%" - and can use this as excellent justification... but I'd suggest (humbly) that you want to avoid pricing your Tenant (and your rent payer - that's me!) out of the property. You don't have to jump 10% in one fell swoop - you can "boil the frog" by being an on-the-ball and competent Landlord and go for 5% this year, 5% next, and so on... the worst thing a Landlord can do is let the rent stagnate - increases should be modest and annual and everyone should expect it - it doesn't help you or them.

If she has been there for 20 years,with children,the place will probably need a full revamp in order to relet.If she has been paying the shortfall without fail,and not caused any big problems I would be trying to find a way to keep her there. If you can't get the LHA rates increased I would see if she could increase to paying say £25-30.

Yes totally agree, better a bird in the hand etc, but it hasn't been a bed of roses and the council only started paying me direct after she got into arrears. Basically she is currently managing to make the shortfall between a two and three bedroom but her youngest has turned 18 so family allowance will soon stop and it will only be a matter of time before he moves out leaving her only entitled to a one bedroom property. I do not have any realistic hope of getting any more money out of her no matter how much I increase it!

Over the years it has been revamped, two new kitchens and bathrooms, new double glazing and doors. I had hoped to put the house on the market  last summer so served a Section 21 (at her request) to enable her to get higher up the priority queue for more affordable social housing. She accepted the offer of a two bed flat but things dragged on. She couldn't get access to view the flat until the day before the Section 21 expired and with repairs and other excuses it got until October when she finally gave back word because of problems with neighbours there.

As I didn't want to put the house on the market just before Christmas I told her I would leave it until Spring to sell the house but she obviously sees me as a soft touch and has been making no effort to get rehoused. I had warned her a couple of years ago I planned to sell the property on retirement and she agreed once the kids left home she would need to move.

Totally take your point on raising the rent in one fell swoop, softly softly is a much better approach. With hindsight I think I was foolish in thinking faced with a big rent she would get her finger out and start looking for something smaller and cheaper. I hate confrontation and want to avoid the stress of eviction but she is someone who knows how to play the system

Quote from: katyb on February 21, 2023, 05:12:33 PMI hate confrontation and want to avoid the stress of eviction but she is someone who knows how to play the system

A dilemma that many landlords face.

Yes, there is a human side to letting and there is room for compassion if a tenant has difficulties - but it is also a business. Your business. You have to run it as such.

With respect to your next steps, you need to be led by your head, not your heart.

Yes I need to put a distance between us and maintain a business relationship, she is not a friend in need, she is my tenant. I think I started to harden when she told me that a benefit officer advised her that if I wanted to increase the rent I would need to give her a new tenancy agreement. Obviously not true but what I suspect is a stall tactic. It's a problem I need to tackle sooner rather than later as her benefit entitlement will only reduce in time. Thanks everyone for your imput

Unless she has some genuine disability,which does not appear to be the case,she has happily lived off the state rather than work for a living.Given what you have told us now,I would serve notice immediately.Be very polite and don't respond to any tactics unless you really must.Play it with a straight bat.Don't take on such tenants again unless forced to by law at some time in the future. Good luck.