Rent increase question

[radderfire]

Letting agents know the rental market is difficult for tenants and they are taking advantage. I'm not a lawyer, but from the wording of 6.1 of the contract that has been agreed upon, I can see that a (probably legally binding) argument could be made that:

1) The rent increase can only be made on 6th Feb.

2) The increase can only be made according to the RPI figure, going back to the most recent anniversary date, i.e. last 6 Feb. So it should be according to the rise in the RPI since last 6 Feb.

3) Yes, if the landlord didn't increase rent in previous years, he is still allowed to increase it in subsequent years, but he must still comply with 1) and 2) above.

Like I say though, I'm not a lawyer, so don't rely on my advice and make your own call. I believe the law around tenancy agreements has changed and they can't do no fault evictions. If you stick to the agreement, I can't see how you'd be at fault. You have some protections in your agreement that aren't in many agreements.

 

[Mercenary Keyboard Warrior]

I would write back saying they seem to have made a mistake, the tenancy agreement states "6.1. The Landlord can increase the Rent every twelve months on the anniversary of the date on which the Tenancy began (“the Rent Increase Date”). For the avoidance of doubt this means that the Rent may increase on 06th February each year"
Hence you will accept a review based on the new payment commencing 06 Feb 2024.

I am trying to work out what this is supposed to mean. "The increase is to be calculated according to the rise in the Retail Prices Index from the start of the Tenancy or the anniversary date whichever is the latter."
Surely the anniversary date will always be later than the start of the tennacy. I cannot see how it could be before.
So as such you could simplify that statement to "The increase is to be calculated according to the rise in the Retail Prices Index from the anniversary date."

Now to my mind that reads to me like the increase should be limited to the RPI from the last anniversary date (06/02/23). He cannot apply from the start since the start date is earlier than the anniversary date.

So personally as an opening salvo I would write back with as per the conditions of the lease you will accept the new rate from the 06/02/24 being the signed contract and you will expect the increase to be [insert RPI] from the anniversary date of 06/02/23 being the later date of contract start and anniversary, again per the contract.

One minor thing, do you have a rolling contract in effect now? IE did you resign a specific contract again at a later date or has the original term now expired.

Edit, just at add my take is the same as Radderfire who posted whilst I was typing.

 

[radderfire]

I do see it from a landlords point of view as well. Because of the affordability method of BTL mortgages (based off rental) and the stress testing that goes into it, you might find they are due to come off a fixed rate and cannot remortgage without putting the rent up.

Buy To Let mortgages should not be permitted in the first place. All they do is make property even less affordable for the less well off that need to rent somewhere.

 

[radderfire]

In summary, my take is they can only start a rent increase on 6 Feb and they can only base it on RPI increase since last 6 Feb. You have that in writing it's in your agreement.

They could only change this if your agreement changes, so that depends on what kind of renewal process is in place.

How you play it depends on how worried you are they might try to evict you somehow, but as I said, I believe there is now more protection around this.

Make your own decisions though.

 

[Ninco!]

I'm sure this was on LBC the other day. The nearest advice is Citizens Advice - The lawyer on LBC warned that going this route can backfire!

The panel can rule in your favour, the increase is unfair or the opposite, state the increase is below market value and recommend it's even higher!

 

[[FnG]magnolia]

The mechanism for increase seems to be based on the delta of RPI over a period.

The increase is to be calculated according to the rise in the Retail Prices Index from the start of the Tenancy or
the anniversary date whichever is the latter.

As a minimum I'd be checking myself what that increase actually is based on available metrics before pushing this further; although it may not feel like it, it is possible that they have undervalued that proportional uplift. If they're taking the pee then I'd suggest you politely point this out with a view to achieving a modest but not ridiculous increase. Basically, use your data.

Worst comes to worst, poop through your own letterbox and send them the bill.

e: typos everywhere, oh my!

 

[Scam]

From what I can tell literally there is no worse housing position to be in right now, than a renter in London looking for somewhere to live. Assuming your flat isn’t a total dive and relatively modern and well kept, £2k/month is likely the going rate.

Only you can judge whether or not the landlord or agent has the appetite to actually evict you though, but I’d be pretty wary of it.

 

[delta0]

Getting evicted has long term implication so do not jump quickly to that. You may find the private rental market very difficult afterwards.

 

[Quartz]

Now from my understanding there are a few options here.

"Thank you for your email; I am going to need to take advice on this and will get back to you within a month." During this month you will indeed take advice and also look at other properties.

Generally speaking, the landlord does not want to lose or evict you. Eviction is expensive and however they lose you, they will lose not only a month or two of rental income but also the money spent on renovating and refreshing the property for the next tenant.

Let's say that the property is off the market for one month and requires £2k of work. Aggressive but not unreasonable. The landlord is out £3.5k. The landlord will take 7-9 months to recoup that expense. That's not trivial. And then there's the cost of evicting you and the uncertainty of the new tenant. And if the work costs more or the property remains unlet for longer then the landlord is out even more.

Something else to consider: if you like where you live you might also consider asking if the landlord might be interested in selling - if the landlord is being pressured by the mortgage company then they may be very interested, especially if this is but one property in their portfolio.

 

[jpaul]

I am trying to work out what this is supposed to mean. "The increase is to be calculated according to the rise in the Retail Prices Index from the start of the Tenancy or the anniversary date whichever is the latter."
Surely the anniversary date will always be later than the start of the tennacy. I cannot see how it could be before.

exactly - if you google the phrase you hit this which repeats same section diddums has

https://assets.publishing.service.gov.uk/media/61126e3a8fa8f506c4d840bb/3_Old_Timber_Court_Reasoned_dec_2021.pdf

and alludes to the 1988 rent act - ... where - initial impression - seems initial increase must be a minimum of a year after rental starts, but thereafter only 6 months notice,
so I think there maybe other phrases in his rent agreement that are relevant too, showing exceptions.

Housing Act 198813 Increases of rent under assured periodic tenancies.(1)This section applies to—(a)a statutory periodic tenancy other than one which, by virtue of paragraph 11 orparagraph 12 in Part I of Schedule 1 to this Act, cannot for the time being be anassured tenancy; and(b)any other periodic tenancy which is an assured tenancy, other thanone in relation to which there is a provision, for the time being bindingon the tenant, under which the rent for a particular period of the tenancywill or may be greater than the rent for an earlier period.(2)For the purpose of securing an increase in the rent under a tenancy to which thissection applies, the landlord may serve on the tenant a notice in the prescribed formproposing a new rent to take effect at the beginning of a new period of the tenancyspecified in the notice, being a period beginning not earlier than—(a)the minimum period after the date of the service of the notice; and(b)except in the case of a statutory periodic [F1 tenancy—(i)in the case of an assured agricultural occupancy, the first anniversary of the dateon which the first period of the tenancy began;(ii)in any other case, on the date that falls 52 weeks after the date on which the firstperiod of the tenancy began; and](c)if the rent under the tenancy has previously been increased by virtue of a noticeunder this subsection or a determination under section 14 [F2 below—(i)in the case of an assured agricultural occupancy, the first anniversary of the dateon which the increased rent took effect;(ii)in any other case, the appropriate date](3)The minimum period referred to in subsection (2) above is—(a)in the case of a yearly tenancy, six months;(b)in the case of a tenancy where the period is less than a month, one month; and(c)in any other case, a period equal to the period of the tenancy

 

[Rroff]

It isn't really a new thing - 2006, as I was leaving anyhow, I get a letter from the landlord of my flat saying "yada yada increase in line with the area yada yada" wanting to put it up from just over £600 to £799 IIRC and shortly after that it was increased to £830 according to people still living there, few years later £1050 and though those flats aren't rentable any more, can only buy them outright on a leasehold, the nearby ones that are basically the same are now £1950/m. The salary for the kind of jobs I and others who'd typically be living in those kind of flats hasn't gone up all that much since then... looking around probably an average of about 5K increase, while having to find probably over 12K extra for rent...

EDIT: Cheaper to buy than rent - from some quick calculations based on the recent selling prices of those flats you'd be paying about £1200/m towards a mortgage.

From what I can tell literally there is no worse housing position to be in right now, than a renter in London looking for somewhere to live. Assuming your flat isn’t a total dive and relatively modern and well kept, £2k/month is likely the going rate.

Only you can judge whether or not the landlord or agent has the appetite to actually evict you though, but I’d be pretty wary of it.

Yeah looking around at flats in London around the border of zone 3/4 anything reasonable bedrooms, size and area, etc. £1950/m seems to crop up a lot.

 

[HangTime]

. 6. Rent Increase.
6.1. The Landlord can increase the Rent every twelve months on the anniversary of the date
on which the Tenancy began (“the Rent Increase Date”). For the avoidance of doubt this
means that the Rent may increase on 06th February each year. The increase is to be
calculated according to the rise in the Retail Prices Index from the start of the Tenancy or
the anniversary date whichever is the latter. To avoid doubt if the Landlord does not
increase the rent in any year this will not affect the Landlord’s rights to increase the Rent
in subsequent years.


The latter date is surely February 2022, the anniversary date - RPI since then is 17.614% if online calculators are to be trusted - £1,550 should come out to £1,823.02?

The thing is the letter says they haven't changed the rent since 2021, so I would assume that means the RPI calc is from Feb 2021, not Feb 2022. £1950 sounds reasonable based on RPI since then.
I might be wrong though, maybe the anniversary date is considered rolling so if there is no change one year that's kinda 'written off' and hence the RPI counter is always less than 1 years worth? But in that case the date would be Feb 2023 not 2022.

 

[Rai200]

The thing is the letter says they haven't changed the rent since 2021, so I would assume that means the RPI calc is from Feb 2021, not Feb 2022. £1950 sounds reasonable based on RPI since then.

Whichever is the latter is the important bit, the aniversary date will be the latter which is Feb 2023. They legalised themselves lol.

 

[Resident]

Buy To Let mortgages should not be permitted in the first place. All they do is make property even less affordable for the less well off that need to rent somewhere.

Should never have gotten rid of the Fair Rent Act. I'll wager that most rents would be half what they are currently if this was still in place so BTL wouldn't be the issue it is.

 

[andybird123]

Whichever is the latter is the important bit, the aniversary date will be the latter which is Feb 2023. They legalised themselves lol.

The problem is the landlord can still go for eviction if the tenant wants to play it cute on the rent increase.

It rarely matters what is in a contract, coming to a reasonable compromise is often the easiest solution as even a judge is likely to take a dim view if one party has tried to negotiate and the other doesn't. Though I'm assuming the OP doesn't even want to take it that far anyway.

OP, if you want to stay in the property another year then make a counter offer that you deem acceptable. It absolutely is a negotiation and if you've had 2 years without a rent increase then you havent done too badly out of it imo. It might not hurt to remind them that their contract states it can only be done in Feb.

 

[Scam]

Yeah looking around at flats in London around the border of zone 3/4 anything reasonable bedrooms, size and area, etc. £1950/m seems to crop up a lot.

On our local FB group we quite regularly get people desperate for flats, quoting budgets up to £1800 for one beds, zone 3 It’s a sorry state of affairs.

 

[Pawnless Endgame]

That seems like quite a rise - I guess his mortgage is renewing and he needs to cover the payments?

That just boils my ****. "Hey, the OP is paying for my mortgage. My mortgage is up for renewal, let's increase the rent so that the OP can keep paying for my new mortgage rate." With 20-25 viewings per house at the moment, the landlords have got the tenants by the balls.

 

[adam cool dude]

It is just a mess. Surely London is going to become critical soon as surely the whole place will become unliveable for the vast majority.

People will go and make their lives else where in the country and basic facilities will just cease to function.

2 grand a month to live in a flat with no garden. It would depress me tbh.

 

[Richie]

This is the main reason the Scottish Government put in Rent Controls for private tenancy. Limiting it to 3% each year to stop landlords from raising it so much at a time of CoL crisis

Due to end in March 2024 mind unless they extend it.

 

[jaybee]

It's a game. The landlord has made their move, now you need to make yours. As much as you will have anger as to the impact of your life this will have (and trust me I have been there, for nearly 20 years in a rent trap) you have to hate the game, not the player. You have options. Most landlords will enter negotiations if you try it, politely and in writing. What you could do, is write back referring to the contract saying that you would only expect an increase every February, and that it should be inline with RPI increase as stated in the contractual clause mentioned, and should not be based on any "lost" years of not increasing it.

Then state that you will be happy to pay X amount from February onwards, and reduce the amount a little bit down to what you perceive to be fair market value. If the amount if about what the rate currently is and you like the property, I would consider only asking for say £150 less, with the intention of them coming back with say £100 off. If you make an offer that is close to them actually not making a lot more money by replacing you with new tenants - and you are good tenants - then the landlord may go with it. The cost of replacing tenants is high with end of tenancy cleaning, agency fees etc.

TLDR, put everything in writing and be firm with what you want.