UK Landlord Forum / Life

Hi,

My daughter has been asked to 'offer' an amount to pay per month for her flat, where she has lived for 6 years, for the start of a new contract on October 1st.

The agent has listed similar properties in the email along with their market values, and has asked my daughter to base her 'offer' on those.

Firstly, how much notice does a landlord have to give a tenant if the rent is increasing. Also, can anyone advise on what to do to reply to the agents email?

Thank you!

I would not respond. She also does not have to sign a new contract,  it will automatically become a periodic tenancy after 1st Oct.  I always give at least 2 full months notice of a rent increase,  and I believe that is what the law requires. 

The landlord and tenant can agree a new rent between them with whatever notice they agree. That can be an agreement with a new contract or without a new contract. If there's no new contract, the tenancy will automatically become periodic.

If the landlord wants to (unilaterally) increase the rent on a periodic tenancy, it has to be a minimum of two months.

As noted, your daughter doesn't have to agree a new contract at all (or respond to the agent's request for a new rent). The government has said that once the new renters rights act becomes law (which they expect to happen within 12 months) all tenancies will always be periodic. And any tenancies with fixed terms will become periodic automatically.

So your daughter could quite reasonably decline to signal new contract which most likely run for that long.

As always the landlord/agent's lever is that they can serve notice on your daughter - but that is a nuclear option and would take a long time and need a lot of effort.

I think I'd be tempted to offer a slightly higher rent, but not the market rate.

And I'd be tempted to offer a slightly lower rental amount... along with citing all the great things about keeping me on as a Tenant. If the payments are up to date, there's been no trouble over the years, and the Tenant is as quiet as a mouse and has been proven to look after the property - then I certainly wouldn't risk all that for an extra £50 a month.

I wouldn't risk all that (and the associated costs) for £100 a month.

In fact, I crafted a 3 year AST recently (foreign students starting a Course) where the rent drops by £50 per month in year 2 and 3. So, hopefully appealing. It's a 3 year AST but I would never try to hold someone in place at year-end if they didn't want to stay, so I'm prepared for it to actually end up as a 1 year term, but I've done all I can to smooth the path.

The last thing is that this could all be the Agent trying something on... the Landlord may be oblivious.

Many thanks! Great advice as usual. My daughter and partner have lived in the flat quietly for 6 years.

The original contract stated 'Minimum 6 months rent to continue unless formal notice is given by either party (Back in 2018) after which it becomes a periodic tenancy' - can the new contract be changed to 12 months without my daughters agreement?

It also states 'one month's notice' for any rent increases. Should that have been changed to 2 months?

By text, the agent has said (2 weeks before 1st October and the start of the new tenancy) 'I can confirm the clauses within any new tenancy would be the same as your exciting tenancy, other than possible arrangements to dates, terms and rental amount due' and then went on to say if you would like to make an offer based on the listed properties market values.....

Edit to the above (Received today by text to my daughter from the agent)

"your landlord has been in touch as they are aware that your fixed term tenancy is coming to an end soon also. After reviewing the open market, they have noted that the rent you pay is significantly below the current market value although they are happy with you as tenants and would to do what they can find a fair balance with the rent. They are proposing a 12 month fixed term (Original contract said 6 months as above) at a new rental amount for the upcoming 12 month-period of £75 increase per month"

"Could you please confirm within the new 48 hours if you would like to proceed with the new 12 month term and the new rate"

What is the question now?

Are increases in rent legal / expected? Sure.

Is £75 per month / £900 per year reasonable? It sounds a lot, but we know nothing about the current rent. If it's £750 or less then the proposed increase is 10% or more. That sounds a lot for the current climate. What has been agree to before? Is it in-line?

As said, soon all tenancies will be periodic from the outset - no more fixed terms - so your Landlord is likely trying to lock something juicy in.

It all depends whether the Tenant really wants to stay there. Play it as you feel. Accept, reject, counter, whatever.

Market Value as a concept is really quite notional... sure, there are comparators but they're mostly tenuous, as no house is the same - easier in a block of apartments, obviously. Or a cookie-cutter housing estate I suppose. Landlords and Agents use the term to push rent increases, that's it.

And no contract can be changed unilaterally, no.

No question, I just wanted some help deciphering above as none of it makes sense.

Thank you for your help, I'm a bit clearer now as to how my daughter responds.

And. now it seems that the last tenancy agreement ran out in April!

Quote from: Pinkwindsor on September 16, 2024, 06:20:02 PMAnd now it seems that the last tenancy agreement ran out in April!

Tenancy agreements don't 'run out'. They specify a fixed term, at the end of which, if neither the tenant nor the landlord/agent do anything, they become a Statutory Period Tenancy (SPT), which runs on month by month indefinitely.

Quote from: Pinkwindsor on September 16, 2024, 06:20:02 PMAnd. now it seems that the last tenancy agreement ran out in April!

Quote from: Pinkwindsor on September 16, 2024, 09:19:59 AMThank you for your help, I'm a bit clearer now as to how my daughter responds.

Well... it really does seem like you're not much clearer in this matter.

The agents don' t seem too clued up either. Only your daughter can decide if this is a fair increase, and if they could afford to move elsewhere.  I have never increased rent by more than around five percent.  Personally,  reliable good tenants who pay the rent and want to settle in are worth more than the hassle and risk of re-letting.  I don' t have any mortgages though,  and that does make a difference. 

Couple two pieces of information together.

1) the Agent saying the fixed term is coming to an end soon
2) the AST having "ran out" in April, e.g. not soon, but in the past

Then you start to assume it could be a template email. 

Anyway, £900 per year is just more cost, more tax and more risk. Sure, there's something to be said for keeping rent increases on the up-and-up (Tenants do need squeezing, after all the Government is going to squeeze Landlords - best get your squeeze in first), but we still do not know what the current rent - and therefore the increase - is.

The money-merry-go-round...

Tenant earns money and pays tax (likely via PAYE).
Tenant pays rent to Landlord, Landlord pays tax.
Landlord may use an Agent, they pay them.
The Agent (I presume) pays tax on that income.

Question - how many times has the same £ being liable for tax as it moves from place to place? It feels like more than once, and that feels inherently wrong.

And Companies House has just increased their fee to submit a Confirmation Statement (an asset that benefits no-one, anywhere) from £13 per year to £34 per year. Got to have a nod to under-control Inflation I suppose.

It sounds to me that the landlord in this case is doing just the right thing - and a 10% increase on a 6 year tenancy that may not have had previous increases is a bargain.

Landlords should be maxing rental income now while they can - it is immaterial if they have a mortgage or not.

My mortgage-free properties generate £35k a year which is my income so I wish to max that where I can. There is a ceiling that properties will fetch and I don't think I'm even close to it - in fact all my units are having increases between 4.5% and 8% this year.

I guess I'm lucky in that my tenants are high earners and I can increase rents every 6 months (they agree to it as they can reclaim it).

I would suggest the OP prepares his daughter for a very bumpy ride ahead as you can guarantee any Government enforced impact on landlords will be passed down in some shape or form.

Every 6 months?  My tenants and my properties,   not to mention my ethos,  could not take that.  I have obviously been making a hash of things for 25 years or so.

Quote from: South-West on September 17, 2024, 04:10:49 PM...a 10% increase on a 6 year tenancy that may not have had previous increases is a bargain.

That's all assumption, we just don't know. On the face of it it does feel like this Landlord wants to play "catch-up", but we need some data before we can say what is a bargain and what isn't.

Your daughter can agree on a new rent with whatever notice they decide, and it doesn't need a new contract. If she doesn't sign one, her tenancy will just go month-to-month. The landlord must give two months' notice if they want to raise the rent without a new contract. She doesn't have to accept a new contract, especially since new laws will make all tenancies month-to-month soon. The landlord could end her tenancy, but that's a hassle for them. It might be a good idea for her to offer a small increase, but not the full market rate.

Quote from: Hippogriff on September 17, 2024, 07:50:52 PM

Quote from: South-West on September 17, 2024, 04:10:49 PM...a 10% increase on a 6 year tenancy that may not have had previous increases is a bargain.

That's all assumption, we just don't know. On the face of it it does feel like this Landlord wants to play "catch-up", but we need some data before we can say what is a bargain and what isn't.

A 6 YEAR TENANCY THAT MAY NOT HAVE HAD PREVIOUS INCREASES = there is a little clue there to justify my "bargain" comment.

Yes, if we had the full history of the property to include agent fees, repairs, insurance, admin, loan fees etc etc we certainly could say more - but for now we base all comments on the info available.