To put it simply: When it comes to rent reviews, you need to have someone behind you that has expert knowledge of the local rental market, to be able to provide you with an objective view of the current state of your rents and the feasibility of a rent increase or the benefits of maintaining the status quo. At Ultralets, we carry out extensive reviews based on a number of factors; current market rental value, affordability checks and risk factors that allow us to make an informed recommendation on any increases (or not) to the rental income on your property.

 

At the time of writing, our number-crunching, fact-fin experts in the Lettings Team have already been carefully looking at rents across all of our landlords and have completed nearly 200 rent reviews in the last month, resulting in both rental increases and agreements to maintain the rent at the current value with another review 6 to 12 months down the line.

 

Caution must be exercised when doing any form of rent review, and/or asking for more money from your tenants. It could go well in the long term, but it might not always be the right thing for you in the short term.

 

We look after your good tenants with strong processes and timely repairs to retain them for as long as possible, not to mention that our average reletting time is just 3 weeks ⏳

Picture this, your tenant's application was accepted 5 years ago and they've been happily living in your property all those years paying the same, £300PCM, rent since the day they moved in. Now consider the market rental value of that property, and similar properties in the area... they've not sat patiently at the same price that they were 5 years ago. All of those properties are now being valued at £450 - £500PCM.

 

The rent review process is a legal, annual procedure whereby landlords can periodically look at the current rental income of their property versus the rental value of others in the local area and decide whether or not they want to increase the rent. Whilst there is no official cap on the total value of the increase a landlord can make to the rent, there are rules that govern whether or not the increase is deemed 'fair and realistic.' There are council bodies that can be appealed to by the tenant, should they feel the increase is not fair and realistic.

 

Back to your property, 5 years down the line with a happy tenant but you're now around £200 below market rental value 😬 It doesn't take a professional property management agent to tell you that a £200PCM increase to rent isn't going to be deemed fair and realistic following one rent review. So now you will be looking at a £25 to £50PCM increase on your rent review, given that a rent increase can only be actioned once every 12 months.

 

Working on a 12 monthly increase of £50PCM, it will take you 4 years to reach your desired £500 PCM to keep up with the current rental value... Not so fast, it's now a whole 4 years on from that £500 valuation, that figure could be higher, and you could be forever chasing that market value.

After everything we've said so far you'd think so, right? Well, it's not always as simple as increasing the rent in line with the current market rentals. You have to consider that your tenant may not be willing to pay the increased rent, and they may decide to leave the property in favour of finding cheaper accommodation, which means you're looking at a potential void period in between tenancies.

 

Say it with me... "Void periods are killing my business"

 

We've estimated the average cost of an empty property, in Hull, to be around £662 per month 💸 Looking at an average rent of £500PCM in our area we've included the following costs:

 

Standing charge for utilities: £22PCM

Loss of rental income: £500PCM

Council tax payable from move-out: £105PCM

Buildings insurance: £35PCM

 

Total monthly cost = £662 PER. CALENDAR. MONTH. (plus any work that might need doing to get the property back in lettable condition)

 

So when you are looking to get the additional £50 to £100 per month in rent, consider the cost implication if it goes wrong. If your tenant vacates over a rent increase, you could be left with a burning hole in your pocket.

Yes ✅

 

There are so many factors when considering a rent review, but there's no harm in reviewing it. Our team expertly and efficiently carry out their reviews without any intervention from the tenant, meaning that if you decide not to go ahead with a rent increase, your tenant hasn't been spooked and they're not starting to wonder if/when their rent will go up.

 

It is only if/when you decide to increase the rent, that the tenant is contacted to have a discussion with our lettings managers about the increase, giving them a chance to raise any questions or concerns with the planned changes and to be informed that they will be sent formal written notice via a Section 13.

 

Our recommendation? Small and frequent rent increases are more likely to keep you up to date with market rental values, keep your tenants happy and keep your properties occupied. Of course, every situation demands very particular considerations, which is why our trusted team are being utilised by our landlords to take that hassle away from you and bring you an informed review every year, or at the end of every tenancy.

 

Does this sound like something you could use a little support with? Don't worry, we're helping all of our fully managed clients achieve the right rents on their properties. Give us a call today on 01482 562 562 to explore your options 📞