UKC

My rent contract has a clause that the rent can be increased annually by "One and a half times the Retail Price Index as published in the month prior to the month the increase is applied". My landlord notified me this week he would be invoking that clause when the 6month contract is up for renewal at the end of next month, so with the RPI being published at 14.2% today, my rent is going up 21.3% next month. Ouch! Guess I won't be putting the heating on at all then.

Just venting really, nothing anyone can do about it, we're all screwed.

Scottish Govt. have abolished rent increases, introduced a rent freeze as it were.

You could move to Scotland?

It's a long way to commute from there back to the south coast for my job!

Minor details.

There are jobs in Scotland you know......

Sounds like he's been waiting for the RPI to peak!

This made me think. Just for context, if we had had to renew our mortgage last month (which we didn't), our monthly mortgage payments would have gone up by about 82% (assuming we'd kept the term the same etc.)

In that context the 21% doesn't seem too bad... though when I first read it it was shocking! 

I wonder what the logic for the 1.5x multiplier is?  Is it a common clause?

Just remember not to ask for a payrise since thats inflationary.

It's clearly a 'standard' contract he downloads and prints off every 6 months as frequently he sends me the 'example' version fully filled out with dummy names and addresses instead of the one with my name & address in!

Sadly not many in my niche field of expertise though! Mind you, I could probably earn more by stacking shelves in McTesco.

Sorry to hear that. Your landlord is a prick.

How does that work if energy bills are included in the rent?
Also, how does it work if the mortgage on the property goes up?

It applies to the total rent. But note that, since councils and housing associations increase their rents in April of each year, the freeze from October 2022 to March 2023 (which is what the Scottish freeze is) is irrelevant in many cases.

There are supposed to be measures in the legislation which protect landlords against unexpected expenses. You would need to read the legislation to know the detail.

Note that private landlords are considering a challenge to the legislation, based on whether or not it breaches the individual rights of landlords.

Twelve month ago that contract term would have seemed on the better side for the tenant as most would have specified a RPI + specified amount or ~ 3%. These days it's just taking the piss.

As a landlord and a renter myself there's a few things I'd like to have tightened up in the rental market.

I'd like to see a mandatory rental prohibition period after a section 21 eviction. If they can't rent the property for say 3 months after evicting someone there's no incentive to boot people out just to hike the rents. Obviously this doesn't apply to at fault evictions.

And we can't continue to see renters footing the bill landlords financial mismanagement, I'd suggest maybe a minimum equity required by landlord before they can rent a property and a much higher minimum deposit for purchasing properties purely for rental with maybe some other measures around borrowing for immediate rental. let's stop the current "oops I exposed myself too much and now the interest rates have increased, ah well I'll just shaft the tenants on the rent" system.

Not nessesarily, the landlords mortgage has probably gone up, the insurance will have gone up, the cost of maintenance will have gone up. 

Life is getting very expensive and is going to get a lot worse before it gets better. 

Well, since I'm still waiting for a carpet in my hallway and the walls to be redecorated there after a flood (from the flat above) three years ago, and the fascia which fell (rotted) off from above the bedroom window in September still hasn't been touched, so I'd say his maintenance costs are pretty low! I had to nag to get the annual Gas Safety Certificate completed, and then he left it until 2 weeks after it had expired before he apparently got it done. I've not seen any sign of the actual Certificate afterwards, mind, though it's not been the statutory 28days yet.

Sounds like he is a prick then, to be fair I did say not nessesarily and not that he definitely wasn't. 

I'd be a bit concerned about his financial situation if he's not doing basic maintenance and is increasing the rent by this amount. It's quite possible he's highly leveraged and is hence overexposed to interest rate changes. Properties with buy to let mortgages can be repossessed a lot easier by the lender. 

One of the ridiculous things about renting is that a letting agency will look into your finances, do credit checks etc, but you have no idea whether your landlord is a financial liability and hence the risk of you being evicted by the lender when they repossess. 

Well that's going to help me sleep at night!

I was wrong, it wasn't September, I first reported this to him on 3rd July this year (and chased up a further 5 times)! With the heavy rain we're having this evening, I've now got water coming through the ceiling over the bedroom window. Yay!

In reply to 

You’re having a shitter mate, and I send my empathies.

Just a thought, and I don’t know you situation and if you have kids living with you.

Maybe you would be both financially and mentally better off camping or in a caravan?

Are there any farms nearby with a caravan on that would let you rent that?

Im not taking the piss or trying to be offensive in any way, just thinking of other ideas that may help. 

Careful; not all landlords have mortgages (i.e. me....). however, the existence of a mortgage shouldnt make any difference. Landlords like owlarts wind me up; there is no excuse for not keeping the property in good order, but its easy to get away with. Look at the recent case in Rochdale; i discussed this yesterday with the managing agent I use, and she was as horrified as anyone, and said that if a small private landlord (such as me) and a managing agent (such as her) were responsible for the property, we'd both be up before the beak. The fact its was a large housing association type company seemed to allow them to hide behind appalling procedures. Anyway, I digress. The danger with such rent increases is of course that owlart moves out to a non-mortgaged property with lower rent, andf the landlord is left with a hefty bill to get the property up to spec before he can rent it again, especially if he is tryingto get premium rent for it.

I would consider to try and negotiate. Tennant turnover is very expensive. 1 month unoccupied and all the legal expenses involved with moving in a new tenant will likely take more than a year payback at +20% rent increase.

What legal expenses are you thinking of there? 

Wow - 21.3% increase is horrific. If it were me I would definitely be looking for somewhere else to live.

The point about your landlord potentially being overleveraged on a buy-to-let mortgage is a genuine concern. A few years ago a mate of mine came home from work one day to find a notice pinned to his front door saying the bailiffs were coming to repossess the house.

He'd been paying £1500 a month but the landlord hadn't been paying the mortgage. It didn't end well. 

Good luck! I sincerely hope you get a reasonable deal where you can afford to turn the heating on.

Fingers crossed anyone buying your place as a repossession would consider you an asset and be glad to have an income. Finding a tenant for a rental property costs money and doesn't even guarantee you a hood one. So buying a property with one already installed is a good deal.

Depends on the landlord, locations and if they're using an agent etc.

An agent will want a month's rent or more to find and check a tenant and then sort contracts. 

Any half decent agent wouldn't touch this place but even if no agent is used they'll surely need credit checking and contracts issuing.

Absolutely; I've been "lucky" with tenants, but with a bit of work, its not hard to find them. set rent below top market rated, gives you a choice, and make sure they are settled. All of my tenants have been in situ for over 3 years, which is great for all parties. Nothing reduces your rate of return faster or more comprehensively than an empty property with repair bills.

I was the same when I was a landlord for a few years, no mortgage, charged 10% below the local market rate and any issues were normally sorted same day or next day at worse.

Sounds like this guy is either totally skint, a prick or both though. 

Landlord needs to buy a second Porsche 

definitely the latter. Former is possible but less likely......

Thanks for clarifying, I'd call them more general expenses than 'legal' ones. I've been a landlord for 20 years now, never used an agent as I like to be immediately available to tenants, and have the same landlord strategy as Ian W posted above. Standard contracts are readily available online for free, credit checks don't cost much.

Treat your tenants well and they'll (hopefully) treat you and your property the same. One tenant I've had in a place has been there for 12 years and we've only put up her rent twice, and it's currently still way below market value. A happy tenant is a stable one so my philosophy is don't get greedy.

Alot will depend on how long you have been there( are you a good tenant), the landlord ( who may not have expected to apply a 21% increase when contract signed), rental market in your area and so on.

So I would draw up a list of benefits to you staying there and try negotiating with them . Aim for a 10% increase.

Worth a shot.

+1 to this ^^

To owlart;

Ask yourself (although the tardy repair timescales kinda override a lot of other criteria...I look upon my houses as significant assets and want to maintain them in good condition for their long term value if for no other reason) whether this increase brings your rent up to market levels or above market levels? Is it likely to increase again (and again, and again......) or can you get a longer term agreement? What other properties are available locally (or within your target area? Would the cost of moving outweigh the value of the rent increase? Are these competing properties or their landlords any better? Make it known to the landlord you are now looking to move (and accept the risk they may not be bothered / prefer this option?

Read your contract, look for a section on landlord responsibilities and hold them to account on that.  If they are not upholding their part of the contract then withhold rent payments until they do.  

That does seem like a very high increase, I put my rents up just 5% this year as a comparison. The question is, what is the market rate for your flat? Is it below what you're now paying? In which case I'd move somewhere else, ideally one which is better maintained too. 

Or has your landlord not put the rent up for several years meaning you've been living below market rent for some time and now he's realised he has let things lapse and has needed to do one large increase to get things back on par with the market rent in your area?

As others have mentioned costs for landlords have increased, especially when fixed-rate terms come up. But also more generally, there are so many hoops they have to jump through now and so much risk to account for if a tenant decides not to pay. You can thank the likes of Shelter for a lot of that, their lobbying is responsible for more evictions and more rent increases than anyone else. Nothing is getting cheaper for any of us anytime soon. 

If your property is in Wales and you live too far away you have no choice but to use an agent.

Fair point. Fortunately mine are local to me in Glasgow hence avoiding an agent, but I have been tempted at times if multiple issues come up all needing simultaneous attention.

And a campachoochoo...

Just wondering how you find your tenants, if you're not using an agent to advertise your property?

We've been very lucky in that the tenants have always been friends of friends / friends of family.

During my brife stint as a landlord we just put an add on gumtree and had dosens of people wanting the house. 

I'm not surprised you are venting - that clause is appalling.

However, with no regulation on private rents that is unfortunately going to happen when landlords such as yours exist. I assume your landlord was earning something from the rent you have been paying and even though prices/energy/mortgages have gone up, they haven't by 21.3% - the  money grabbing lowlife.

Dave

On the other hand the landlord could have put this clause in a few years ago when inflation of 10% plus  was not on anybodys minds.

But he's choosing to exercise it now, to its maximum extent. He's not forced to do that by not having thought it through years ago.

It’s in the contract so he is entitled to do it so why not. 

Not sure you are correct about price rises being less than 21%, Interest rates alone have gone up from .25% in December last year to 3% now. If his landlord had a £100000 buy to let tracker mortgage his cost just for the mortgage repayments will have increased from around £150 to around £400, I'm not saying he's right to put the rent up as much as he has though.

If that's really the way you look at it, then I'd be wasting my time trying to explain any other considerations. Suffice it to say that the world would be an even worse place than it already is if everybody looked at life that way.