Can I increase rent to market rate?

Check the terms in your AST, it may actually restrict the amount you can increase it by. Assuming no restrictions and you are now in a periodic agreement you can increase up to market rate. Your tenant may not like it but are they likely to leave? If this is market rate, then to pay less elsewhere would mean a downsize, this may prevent them from deciding to leave. If you like the tenants and want them to stay, you could increase it half way. Are you being greedy? You don't refer to increased costs, just market rate!

Reply to the comment left by Rob Crawford at 10/07/2023 - 13:54
Tenant has been a nuisance to be fair and for years there was no increase , AST has expired and I have used a section 13 , it's just the words rent increase must. R "fair and within market rate" . I really don't mind if he leaves , all I wanted to know if it's legal to increase by that much

MAAZ

Reply to the comment left by Rob Crawford at 10/07/2023 - 13:54
I'm not being greedy at all , he was paying below market rate for over 5 years , costs of course have increased and so does rent. The AST has expired so he is periodic tenancy , i have used a section 13 , thank you

Reply to the comment left by Juan Degales at 10/07/2023 - 12:43Yes this is true in many instances.
I have inc by just 60 pcm and suddenly loads of repairs needed.
I have one just making lists and seeing I have served a S21 are sending the trades out. Many like door handles loose, the lastest toilet not working can they come urgently. Plumber said handle loose and they must be undoing it.
Toilet actually fine.
Another area where you see lots of repair requests is if they suddenly don't qualify for housing element.
When the money is now coming out their own pocket.

I've always been a little wary of the common use of "Market Rates" as being a reason for which amount to increase rent.

What it effectively says is "This is what I could be charging, so I will".

It's also problematic with the recent interest rate increases. If someone is coming off their existing mortgage and now has to pay an extra £600 a month the feeling would be to pass on as much of that extra cost to the tenant as they can. As it is likely that several People would do the same, that increased amount is now the "Market Rate" whether it needs to be or not.

Reply to the comment left by The Forever Tenant at 11/07/2023 - 16:16
This is the reason for many selling up as no longer any profit unless rents go up in line with mortgage increase. This then gives excuse for everyone to charge more because others are.....and round and round we go!!!

I'll have to up my rent by £400 a month from £1020 (the local rate £1500). Its either that or I'll have sell it as I am due to come out my fixed rate and a new mortgage won't stack up with the lower rental figure that I have been charging the last 5 years. The tenants are lovely but the ever increasing mortgage rate is not.

There are a lot of pros and cons to keeping rents at market rent levels throughout the tenancy. Equally there are numerous procedural hurdles to overcome. But staying with the point raised, a factor to consider is what is the Broad Market Average Rent for the district published by the Valuation Office.
Their figures tend to be a little historic but it gives you a good starting point. It may well be a factor an assessor of what is reasonable might start with.
How do you abide by your duties (which are becoming more onerous) as a landlord without contemporary funding? You do provide an essential service but so do the supermarkets.

I've recently provided a third bedroom within a two bedroomed property, let to the same tenant for many years, a single working mum with two boys, one of whom has reached 16, so qualifying for increased "needs" for LHA. We've agreed the new rent, which I will set in line again with the LHA rate.
What I'm wondering is: write a letter (possibly back dated) stating new rent, or should she sign a new AST (bearing in mind that existing one is Periodic and doesn't mention number of bedrooms)? I really don't know which is best (for both of us).

Reply to the comment left by berkstunt at 17/07/2023 - 13:24
My tenant has asked to change her rent date and I've been advised that any changes to original tenancy agreement warrants a new AST. Reason given is that in the event of issues (especially if pursued thru court) paperwork has to be relevant and up to date otherwise you run the risk of claim being discharged on grounds of negligent documentation. Your changes are more extreme so I'd say a new AST for both yours and your tenant's protection.