Proposed Rent Increase Cap by Labour
General Discussion

Clavell
Clavell
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19 Posts
2 months ago
0

I thought I would share a small problem on my horizon.

I am aged 83 and for over 20 years  have  (with my wife) been landlord of a 1st and 2nd floor maisonette in Lambeth occupied by 3 tenants - now designated as an HMO. One tenant has been with us for 8 years, we've never had a void period  and have had good relations with all tenants.

In March 2025 our 2% mortgage deal comes to an end and a new fixed term  is likely to double to at least 4%. 

I've been a bit relaxed with rent reviews and then Covid 19 came along.  We are currently charging rent of £2,015 p.c.m. 

A letting agent advises a market rent of c.£3,000 p.a. so  we have a shortfall of nearly 50%. While this is acceptable at present, when faced with at least a 100% increase in mortgage payments it will be uneconomical for us to retain the flat for pension income, and we will be faced with the follow alternatives

Propose a 50% rent increase in March. From £2,000 to £3,000 p.c.m.   I appreciate this may be seen as unfair to the tenant but according to a recent Labour Report if they are in government, excessive rent increases will be banned and are likely to be capped to around 5%.

Sell the flat. The estate agent advises that the  demand for sales to landlords is pretty dead and the flat is highly likely to be bought by an ‘end user’.  It will therefore be ‘lost’ to the rental market.

We fully appreciate the problems facing the younger generation, whether they are  tenants or buyers, but with  the recent legislation, and when faced with such a hostile rental environment more private landlords will just sell up.  This will make life even more difficult for young tenants to find something to rent.

I wonder what the view is of the NRLA!

 

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