AST ending - best way to proceed incl. rent increase?

Tenancy Types and Management

Hi everyone,

The AST with the current tenant is ending in March 2024. The tenant has been great so far, after 2 years, and has said she would like to stay in the property after the end of the term

I would like to increase the rent at the end of the  term (as I have done every year of the tenancy), but slightly more this time to bring it more in line with current rents in the area. However I'm happy to charge the tenant slightly less than this as she has been a good tenant and I'd like to keep her in the house.

What would be the best way to approach the situation?

My thoughts were:

- write to the tenant now explaining that I intend to increase the rent, which would take effect at the start of the new tenancy. This would give approx. 6 months notice.

- if she accepts this, I would create a new 12 month AST to start after the current term.

Or, write to the tenant explaining the tenancy can now move on to a rolling tenancy, and not create a new AST, but include in the letter the new rental  amount.

Hope that makes sense,

Thanks!