Should I sell my flat despite my loyal tenant?

Your same as me, we should not be in this position, also if they get their way we wont be able to evict if it costs them more to go elsewhere. We need to be cut throat and not care, but we cant change. So one option is to sell with tenant insitu, but you wont get the best price.

You can increase the rent with a Section 13 up to market rent. Your agent is lying there is no such thing as 5% maximum increase. You do not need a new contract. I would ditch your agent as they are liars and also useless and pay the £250 exit fee that is stated in your contract with them.
I’d meet with your tenant and tell her that either the rent is going up to market rate (less £50 for being a good long term tenant). If she doesn’t like it then you are going to sell the flat. Her choice. If she wants to stay put then you have a few months to see whether she can pay the increased rent before issuing a Section 21 (whilst you still can) if she can’t pay it.

It seems to me that the fault lies with the Estate Agent. I would take him on on the basis that he has failed to do his job over a period of 9 years. His failures have hurt you and potentially your tenant. If he is a fair man / woman he will accept his short comings and let you terminate without any fuss. It won’t be that easy but you should be able to come to some agreement that is reasonable to you.
Make a list of his failings and talk to him face to face. That should include poor advice and failure to recommend rate increases over the years as well as the points you have mentoned.

Reply to the comment left by Dylan Morris at 06/11/2024 - 11:09
Your agent is lying there is no such thing as 5% maximum increase.

That was my initial thought too Dylan but it might be restricted by the tenancy agreement.

Reply to the comment left by Monty Bodkin at 06/11/2024 - 11:24
If its restricted by the tenancy agreement the landlord wouldn't be able to use s13 at all.

Tbh, the agent sounds totally incompetent. You could try selling with the tenant in situ. Investors would buy with a good tenant, but they'll want market rent from her and their offer to you will likely be below market value.

What would the numbers have to look like for you to want to continue?

Suppose for example the market rate is £700 but you would be happy at £600. Why not tell the tenant that you can't stay in the business unless it's at £600 per month? Let them decide what happens with the property. If they want you to still be their landlord, the rent goes to the level you're happy with. If they want to leave, they can leave. Seems kinder than pushing them out on the street. They may want your new deal. You only know if you ask. If the old AST was faulty or contained a bad 5% clause, don't tell the tenant. Just offer a new AST at the new rate and say it's linked to you leaving the old management company. The tenant doesn't need to know your reasons. But be careful. Do not offer a long tenancy beyond 6 months. As long as you don't intend to sell, you don't need to worry about offering more time to the tenant. The fact you're willing to sign a new AST with them instead of issuing S21 is proof enough you want them in there. Consider using an AST with a break clause just in case this tenant changes her mind over the rent increase.

If she chooses to leave, ask yourself if a new tenant at today's market rates would be enough to keep you in the business. If so, be ready to let your tenant leave and get someone else in who will pay full price.

It's not that you want to leave the industry. It's that you want a fair deal. No harm in telling your tenant "I need a fair deal or I'll stop being your landlord". It's better to evict then sell, since an empty property will pay more than one with a tenant, but the choice is yours. Some sell with tenant in situ, and that's okay. It's your loss at the end of the day

I also made the mistake of not doing annual rent increases. It just hurts the tenant in the long run as when they need to move on their rent is so far under the market. You have good suggestions above. I would suggest looking at Openrent - they have a great platform - its so easy even I can work through it, they provide an AST very thorough one too! and you can add your own clauses into it. They collect rent for about 10 stg a month, they ask for all the documents you need to make you legally compliant, insurance, PAT Test, EICR, Gas Safety etc etc and they send reminders when you need these renewing. They sent the inventory ( I have my own guy I use) and they send the How to rent guide. They also place the deposit with a deposit company and to my surprise the process for us to let a troublesome tenant leave and claim costs on her deposit they handled it and we got paid immediately. You try to do it via an Agent or yourself it was the most painful process to go through. Given the usual incompetenence of the Agent I would fight the 250 fee, its not worth them taking you to court, the courts are so backed up and the fee is almost as much as they want to screw out of you. Good Luck. but dont do yourself out - we've all been there and ends in tears usually for you.