How (best) to increase the rent with longstanding tenants?

I find an honest conversation is usuallly effective.
Explain that you really appreciate them amd they are a great tenant and you have maintained costs for 4-5 years but you are now running at a unsustainable loss.

Show them that if the rent had gone up in line with inflation it should now be £x pcm.

Look online and say the cheapest comparable within a 2 mile radius is now £x

Say becuase theu are a brilliant tenant you are diacounting the rent by £x pcm so they are still getting a great deal.

Give them at least one more month at old rent so they can rebudget.

Most reasonable people will accept the facts and they may not be happy about it ( whonwould be) they accept.

If they dont (indis have one) domyou want to give notice?

They did but after 3 weeks they got in touch to say they were staying on.

People know stuff is going uo so if you tey to be fair it often is accepted.

Good luck

i don't wish to point out the obvious flaw in your strategy but unless you are mortgage free or very well off it is incredibly naive to keep rents at a 13 year low. It seems you are now in a position where you need to ask for an unreasonable uplift to cover your costs. You could start regular smaller uplifts on an annual basis keeping rents below anything comparable locally. Tenants will object and look for alternative accommodation but if you are still cheaper than the market they will realise that they are better off accepting the uplift. It would seem unfair to ask for a massive uplift all at once, a reasonable conversation should hopefully get things back on track. Good luck.

I also charge less than market value with good tenants I get on we’ll with and don’t want to lose them. They know they’re getting a bargain and stay put, not forgetting void periods and the risk of new ‘bad’ tenants which can be a nightmare! So, ‘swings and roundabouts’! If the rent is to go up e.g. £60 a month - tell them it’s going up by £15 per week which doesn’t sound so bad!

Coming from a tenant perspective, the first post is right. Have a conversation with them first, either by telephone or in person to discuss it.

What you should do then is explain how the increase is relevant to yourself.

You can say that the market rate has gone up everywhere, but that just make it sound like you are money grabbing and that you don't *need* to increase rent, but are doing it because you can.

Also try and frame any increase in relation to costs for which you could have had no control over. For example you can say that your mortgage costs have gone up, but it will be thought that is your fault for being so leveraged in the first place.

If you can spin it along the lines of increased insurance costs, inspection costs, etc. its a lot more palatable.

Reply to the comment left by The Forever Tenant at 03/01/2023 - 13:04
Useful advise, thanks. We have a similar scenario, where the tenants haven't had an increase in a few years, but we do now need to increase the rents. The cost of the property insurance and rates has increased to a point which cannot be absorbed any further. The increase will be in the region of £50pcm, so I hope the tenants can see this is reasonable.

Our tenants usually stay for a year or two, sometimes three, so we do not have this issue. We reduced rents for the pandemic and increase rents every September for existing tenants in line with relevant inflation, which is about 6 % based on wages. As we are bills-inclusive, new tenants pay much more. One flat is now £1,320 when it was £790 for the former tenants 15 months ago. With changes in interest rates, fixed-term tenancies and EPCs, many landlords would have to apply much bigger increases to existing tenants. AS this is a university area, the end of fixed term tenancies will mean large increases, as tenants leaving part-way through the academic year would leave long voids, and landlords would need the cash reserve in advance. The new tenancies do not give tenants security, as there are many reasons for ending the tenancy without the terms of the tenancy being breached. We will still have to give fixed-term tenancies, which I believe will still be legal. It is just Section 21 that is going, which we have never used.

I had a direct chat. I listed all the things a LL had to pay from the mortgage cost to gas certs to EPC, building insurance and licencing, average maintenance work etc I then added in their current rent and predicted increase to show them the current status.
They just thought I took the rent as profit. It opened their eyes! An agreement was reached and going forward a rent REVIEW would be done each year. I made it clear that this did NOT mean a rent increase, but they were aware if my costs do increase - so will the rent.
I asked

We use a similar approach. It was easier when tenancies were 2-4 years. Now at 10+ years, not being proactive with rents can lead to a hole. We do not change the rent in the early years, basically we save if a good tenant stays on (new tenancy costs). We share that saving. After this period we notify a year in advance of a proposed rental increase. This gives time to negotiate, no surprises.

Reply to the comment left by The Forever Tenant at 03/01/2023 - 13:04
I will be meeting with all of my tenants. I haven’t met those that have been found by agents and I want to see how we can help each other. I hate that tenants are afraid to report genuine problems or make suggestions. Knowing whether they are happy can help me decide whether to fix a mortgage or prepare to sell. If I sell and the tenant helps that process I am happy to assist them financially. I have sold two properties to tenants and helped four tenants to buy or relocate elsewhere.

These are stories about good and considerate Landlords that never get into the press - all we hear is the consistent and depressing narrative about how greedy and 'rogue' we all are.