A new survey conducted by the Residential Landlords Association shows that the majority of buy-to-let landlords are looking to increase rents.
The series of tax-hike announcements, alongside the changes to mortgage interest tax relief and wear and tear allowance have lead many investors to reconsider their actions.
According to the investigation, 84% of landlords revealed they are considering increasing rents in the wake of the Chancellor’s assault on the sector. 78% said that they felt the changes would put them off investing in further properties in the future.
This comes as a blow to the sector, with demand showing no signs of slowing down. A recent forecast estimated that an extra 1 million homes to rent will be needed by 2021.
Are you a landlord looking to increase your rents? Make sure you follow the correct procedures:
Be in agreement: For a fixed-term tenancy, you can only increase rent if your tenants agree. If they do not, then you can only increase rents at the conclusion of the fixed term. Explain to them why you have made your decision and make sure your proposed increases are fair and comparable with local rates.
Follow the terms: Should your tenancy agreement outline a procedure for increasing rent, you must adhere to these terms. You do not want to be claiming on your rent guarantee insurance due to tenants refusing to pay rent. What’s more, it is unlikely that your insurance will pay out for your negligence!
Do the write thing: If the tenancy agreement does not show a plan, you can renew your conditions at the end of the fixed term, with an increased rent. Once again, this should be agreed with your tenant and a new written record should be signed and copies kept by both parties.
Show good form: When raising rent following the conclusion of a fixed-term agreement, you should use a ‘Landlord’s notice proposing a new rent’ form. If your tenant has a weekly or monthly agreement, you must give them a month’s notice of rent rises. Should your tenants be bound to a yearly agreement, then six months notice must be given.