Am I wrong?

If the property was owned by a company you would heave been negligent in your duties. As things are you are simply demonstrating that you should not be in business as a landlord. Calculate the rental return on the original property costs to you and then against the current market value of your property. When you first let the rental income would probably have represented a reasonable return on your investment. I very much doubt that is the case now. You are acting like so many people who leave cash in banks paying, say, 1% pa interest rather than moving your funds to those who treat customers properly and now pay circa 5% pa. It is true that a good tenant is worth keeping at a slightly reduced rent, as you may have remained with a bank paying 4.5% rather than move to an unknown paying 5%, but it is madness to accept so much less as you are doing at present. I strongly recommend you accept the advice of others replying and sit down and explain things to your tenant.

I have done the same thing only increasing the rent for new tenancies. Basically l don't have mortgages and so slipped into thinking that l didn't need to increase the rents. Wrong. Just looking at the current costs of running a large victorian house split into 4 flats compared with 8 years ago shows the increase is huge. I wrote at the beginning of the year to all my tenants reassuring them that l would not be putting up the rent whilst the economic outlook was grim. That situation has now eased a little with lower utility costs and wage rises. So a few weeks ago l texted each one and said l would be reviewing their rents on the anniversary of their rental agreements. I thought it fair to give them plenty of time to think about it before l talk to them and discuss the increases. This seems to have worked as a tenant has written and thanked me for the warning. I won't let rents drift on again.

Reply to the comment left by The Forever Tenant at 04/10/2023 - 14:17
Like most landlords, I have no issue with being treated like a business by the government. However landlords are treated more harshly than any business when it comes to allowable expenses. We are not allowed to claim our mortgage interest against tax. So if the mortgage costs £1000 a month and the rent is £1000 a month, we get taxed on £1000 rent effectively paying tax on money we have not earned. For what it is worth, in this scenario I would increase the rent but not up the rent to a full market rent on the basis that voids cost and I would want to avoid replacing my excellent tenant with one that might cause me stress. I also would avoid refurbishment costs which would be considerable after 10 years.

Reply to the comment left by Tim Rogers at 04/10/2023 - 13:36
Sorry
I would sit down and discuss my costs with a tenant - it's my business.

All they need to know is my costs have increased, and along with market rate rents I'd need to increase rfnt.

Reply to the comment left by Marlena Topple at 04/10/2023 - 15:19
PRS Iis finished sell up and avoid the stress

I can't think why if rent is kept low Davis assumes the tenant will never be able to afford to move and what is preventing this tenant from moving?
kate

We have often left rents unchanged, partly becuse we actually have very good tenants who respect the properties they live in. however, we have been looking at them closely as local rents have been rising massively, along with our costs, and we are not a charity.

What I tend to do when looking at rents is assess the market rent then split the difference with the tenant. That way they are clear they are getting a deal (probably not available elsewhere) and I get to keep a good tenant. I've a couple of houses coming empty and they need some works prior to reletting; just wear and tear (not tenant related) and I will need to spend a few grand on each. I could do without it, hence why I encourage tenants to stay.

Reply to the comment left by SteveFowkes at 04/10/2023 - 15:21
I don't give details just outline that my interest costs have gone from £2000 pa to £12,000 pa. I also point out the current market rate the flat can rent for.

I find, when faced with facts, tenants tend to see reason.

I think I would set out all the costs involved in renting out each flat. As is required for service charges under long residential leases send out an annual statement setting out the increase or decrease or projection of each cost item set against payment made by tenant and set the rent for the next year with balancing charge so that a good tenant will understand

Good tenants are like children (I'm not saying tenants act like kids....I'm using this as an example to explain human nature in general)....if you constantly endow them with financial gifts (which you are doing by never increasing the rent - no different to not charging a child housekeeping when they get their first job) they end up taking it for granted & one day when you do want or need to put the rent up/charge them housekeeping, they will moan. This is because they've not been educated/disciplined into good financial management & fiscal responsibility. I had similar experiences with 3 long standing tenants in 3 similar size flats & came to my senses knowing I needed to charge more for both our benefit, so I explained to them that when they moved in the market rent was £1,300pm which they were still paying vs current market rent was £750pm higher at £2050pm yet my costs had gone up almost threefold, so I proposed we meet halfway at £1675pm with annual rent increases thereafter of £100pm until we hit 10% below market rent & thereafter to be reviewed annually in line with the market. 1 left & I got new (fantastic) tenants who today pay £2450pm! 1 met me halfway immediately & we're now within 10% of the market rent, and the last one couldn't afford to jump to halfway immediately so we agreed annual bite sized increases until just 2 months ago she had to go into residential care & I've just re-let at £575pm more.