Data shows very few landlords resisting rent rises

Some of us will have increased rents for some tenants, not all.
Until a couple of months ago I was in the catagory of landlords who very rarely increased rent for existing tenants.
When the utility price increases were announced in August taking the included annual utility bill for 8 HMOs from £8000 (at August 2021 prices) to £35000 I had to do something. For some of my HMO tenants it was the first increase in the entire 5 years they had been in the house.
My LHA tenants are still paying LHA level rent, which across those 6 properties is at least £1200 a month below market rent. There is only so long I can subsidize those people from elsewhere in the portfolio.
Five of my mortgage deals come to the end in 2023. They're all low LTVs but it's going to be a big increase in payments made even worse with Section 24.
So this year I have increased the rent of 14 (out of 41) tenants by between £10 and £70 a month. Next year it's going to have to be more but without knowing what mortgage rates or utility costs will look like by then there's no way of predicting how much.
The alternative is to sell one or two properties and clear 2 or 3 mortgages but I hate the thought of evicting good tenants.

• Andy Marshall
• 21 October 2022 09:35 AM

I am sorry to say unless you have very low mortgages you are going to need to sell. The concern is that if rates keep going up it will have an effect on people's purchasing power in which case you end up selling more as the property prices will have to come down. I do not see a crash, but dependent on how high rates go will affect property prices. I was a witness to this at the end of the 80's, and that was a crash.
I have already sold one property, 2 on sale now and one will be going on sale once the tenants have left, whom have put themselves in a position that I have needed to evict.
If you have a mortgage on your BTL, unless you have at least a couple of years on a fixed deal or no or very low mortgage there a a couple of very difficult years ahead.
This could all be rectified if the government get id of section 24, but i just don't see this happening, well not until Landlord's start to fail!

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• Andrew townshend
• 21 October 2022 09:53 AM

Andy, I also remember the late 80s early 90s well, there certainly was a crash, a great buying time though, But how many can remember those times now ? a lot weren't even born

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• Jo Westlake
• 21 October 2022 16:00 PM

I bought my first 2 houses in 1987 just before prices shot up like a rocket, sold one of them a year later just before the crash. Bought another one in 1991 at a very discounted price, a new build that had missed the market and been stood empty for 3 years. Lived in it for 8 years while it's value continued to drop and still own it as a student HMO. I have very clear memories of the property market in the late 1980s and right through the 1990s. So much of it was luck rather than judgement. Either good luck that you happened to buy or sell at what turned out to be a good time or bad luck that you didn't.

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I've been lucky enough to have had 6 properties come vacant over the last couple of years, all re let at market, or very close to, rates, it's never easy to increase good excising tenants rent

It's going to be a difficult year for all of us with mortgages. Either rents will have to increase significantly (I'd say at least 10%) or properties sold. I agree it's not nice to have to put rents up or give notice to good tenants, but we will have no choice.

• Simon Logan
• 21 October 2022 11:21 AM

Agree, we are not registered charities after all.

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An alternative headline could be Around 10% of Landlords continue to resist increasing rents despite inflation running at over 10%.

We need to get the message across that historically we don't increase rents for existing tenants, which means that every few years there will be a substantial increase in rents asked from new tenants.

Red Patrick Harvey is using this practice (which is greatly to the benefit of existing tenants) to twist the facts and claim 30% rent increases are common in Scotland.

Scottish tenants will pay the for his dogma over years to come!

• Andy Marshall
• 21 October 2022 09:40 AM

The problem here for me, like many Landlord's i did not increase my rents. When i tried to re-mortgage at the beginning of the year the lenders told me my rents were too low. This is at an almost 50/50 LTV.
Since then my rent's have gone up between £50-£75 but with the increase in rates I still cannot re-mortgage.
Selling some has been and will be the only option for me. Though that said, I would have started selling anyways, as I prepare for a simpler life in semi-retirement.

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I shall do my best to resist ... not

I review rents every year & usually increase them in line with, but below, market rents. Because of that this year my tenants will get their usual rent rise or thereabouts so there is no huge shock for them & I can absorb the extra mortgage costs until the good times return!

There is no advantage to LLs of being kind to tenants in the form of very low rents unless you are a charity. Tenants don't realise you are doing them a favour & when you put them up they will complain. We are a business & we should behave like business people.

An extra round of SL next year is a different matter - rents will go up more than usual. Thanks Nottingham City Council!

• Simon Logan
• 21 October 2022 11:28 AM

Very well said and totally true.

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• Andrew townshend
• 21 October 2022 14:06 PM

'' until the good times return'' ? Tricia you must be a lot younger than me, I can't see the good times returning during my life time, we've had them

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Three hundred respondents is quite small and what areas? In business you either recover your costs or go bust. Interest rates have been ridiculously low of many years, great for the financial institutions, the city, etc but savers are crucified. That's why pensions are disappearing, rapidly.

I held rents because of Covid, but with the interest rate rises, I will have to now increase rents. What the Bank of England fails to appreciate is existing borrowers are trapped.

I have heard of people purportedly in B & B, in Hotels (called hotels or dumps) paid for by the Council but not actually staying there, just put in appearance occasionally to further their cause, obviously have somewhere else to stay, hotel will be getting paid no problem that end.

• Andrew townshend
• 22 October 2022 09:04 AM

That doesn't surprise me at all

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