Can I index link rents into my tenancy agreements?

Reply to the comment left by at 16/05/2022 - 10:38
It's not clear what you mean here. If there is no rent review clause then the statutory fall back is Market Rent. If you serve notice, that rent becomes payable unless the tenant appeals to the Residential Property Tribunal - Rent Assessment Committee.

You cannot override these provisions by revising clauses in the AST agreement.

Reply to the comment left by Graham Bowcock at 16/05/2022 - 11:56
What is the definition of "Market Rent"?

If your interest costs escalated such that you were losing money and raised rents to cover the rising costs, could it ever be inferred that you weren't charging "Market Rent"?

Dear Graham, you may wish to consider provisions of S6 Housing Act to incorporate new clause in a statutory periodic tenancy. Such a. clause could be a new rent review clause. But nothing betters a good AST in the first place.

Reply to the comment left by Dylan Morris at 16/05/2022 - 09:46
It might be easier to state in the AST that there is a rent review annually and if a rent increase is proposed a S13 will be issued.

That way you can ask market rate at the time. Simple. If the tenant wants to argue this then they have to take this further to a tribunal.

NB if it is increased to market rate how can a rent increase be found 'unfair'???

Reply to the comment left by David Price at 16/05/2022 - 11:52
or better still the rent will be ' the market rate comparable to the type, size and location of the property, to include any additional taxes imposed by local or central government and any increases related to the cost of property ownership."

Reply to the comment left by DSR at 16/05/2022 - 16:19
That's the kind of thing I'm wondering about. If you can't recover all your finance costs against your income as a non-LTD company then your only recourse is to raise rent (or sell and exit the PRS). If the government said during a recent pandemic that tenants didn't have to pay and you've lost money as a consequence then your only recourse is to raise rent.

So what does "Market Rent" mean?

Reply to the comment left by Beaver at 16/05/2022 - 16:27
market rent

noun
the amount of rent that can be expected for the use of a property, in comparison with similar properties in the same area.

eg "as the area develops, market rents will only climb"

Info on gvt own webiste.. note the' the rent increase must be fair and realistic, which means in line with average local rents'

When your landlord can increase rent
For a periodic tenancy (rolling on a week-by-week or month-by-month basis) your landlord cannot normally increase the rent more than once a year without your agreement.

For a fixed-term tenancy (running for a set period) your landlord can only increase the rent if you agree. If you do not agree, the rent can only be increased when the fixed term ends.

General rules around rent increases
For any tenancy:

your landlord must get your permission if they want to increase the rent by more than previously agreed
the rent increase must be fair and realistic, which means in line with average local rents
How your landlord must propose a rent increase
If the tenancy agreement lays down a procedure for increasing rent, your landlord must stick to this. Otherwise, your landlord can:

renew your tenancy agreement at the end of the fixed term, but with an increased rent
agree a rent increase with you and produce a written record of the agreement that you both sign
use a ‘Landlord’s notice proposing a new rent’ form, which increases the rent after the fixed term has ended
Your landlord must give you a minimum of one month’s notice (if you pay rent weekly or monthly). If you have a yearly tenancy, they must give you 6 months’ notice.

Reply to the comment left by DSR at 16/05/2022 - 16:55
Which link?

interstingly enough just looked up one of the last cases of a tribunal where a tenant stated the rent was excessive...
https://assets.publishing.service.gov.uk/media/6215261b8fa8f5490e284d77/Flat_8__11_Orme_Court_Dec_22.pdf

Gives you some idea of how the system works and what is taken into consideration. Seems if you can provide list of similar rents for similar properties in the areas (the tribunal doing the same) then the LL wins.