Getting the rent right is crucial for every landlord. In this article, we’ll explore whether now is the right time to raise the rent on your investment property and how to approach it effectively.
Why Landlords Should Review Rent Annually
We believe that all landlords should review the rent they charge every year – and, if appropriate, raise the rent.
Here’s why.
Landlord costs, from maintenance expenses to mortgage payments, typically rise every year. Ensuring your rent keeps pace allows you to maintain your property to the high standard tenants expect.
Most tenants anticipate moderate rent increases over time. A small, regular adjustment is often preferable to a sudden, significant hike after several years of unchanged rent.
Regular rent reviews are not only fair but also help you stay competitive in the UK rental market.
The Impact of New Legislation on Rent Reviews
Another reason to review and, if necessary, raise the rent annually is the upcoming Renters’ Rights Bill, which is expected to become law in 2025.
Under this legislation:
- Landlords can only raise the rent once a year and must provide two months’ notice.
- Rent increases will be capped at market rates.
- So-called rental ‘bidding wars’, where tenants offer more than the advertised rent, will be banned.
This means you must ensure the rent you charge is at the correct level before the new law takes effect.
When Raising the Rent Could Backfire
There are situations where increasing the rent could cost you money. If your current rent is already at or above market levels, a rent rise may drive tenants to leave. Finding new tenants willing to pay above-market rent could be challenging, potentially leaving your property empty and impacting your income.
How to Determine the Right Rent
Rather than guessing what rent to charge, it’s best to seek expert advice. Local letting agents know their markets inside out, including what other landlords are achieving and what tenants are prepared to pay.
They can provide a detailed rental market analysis to help you determine the optimal rent for your property. Setting the rent at the right level ensures you remain competitive while maintaining a strong return on your investment.
Our Expert Advice
If you’re considering whether to raise the rent on your rental property, we can help. With our in-depth knowledge of the local rental market, we’ll guide you in setting the correct rent to balance tenant satisfaction and profitability.
Contact us today for expert advice, and let us help you navigate the changing rental landscape. And if you know a landlord or investor who could benefit from this advice, please share this article with them.
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