Partners and Suppliers Jack Vlasto 21/08/2023

A guide to setting rent prices and protecting your rental income

Rent prices in the UK can be affected by economic reasons as well as more personal factors - from the general cost of living in a specific area to your mortgage repayments.

The size, standard and condition of the property along with the current market will also have an impact on the amount of rent you may set. 

In this article, rent guarantee insurance provider Rentguard breaks down key areas for you to consider when setting rent prices, along with tips to help in the event your tenants can’t or won’t pay the rent.

How location can affect rent prices

The location of your property can affect the amount you charge for rent for several reasons.  

Proximity and accessibility to amenities will impact rent prices. Locations close to schools, parks, shopping centres, and public transport tend to be able to command higher rents. 

The quality and reputation of local schools can have a particular bearing and may help you attract families who are willing to pay a premium for access to quality education.

A prized and popular location will likely see high demand for rental properties, which will also determine rent prices. When there is limited housing stock in a high-demand area, this is likely to be reflected in the rents landlords charge. 

Look for similar properties in the area to get an idea of the going rate for rented properties. Consider factors like property size, location, amenities as well as condition. Does your property have any unique selling points or desirable features that may help you command a higher rent?

What other fees should I consider when setting rent prices?

You may consider including amenities in the rent. This can help to attract new tenants and retain existing ones.

When setting your rent, determine whether you will include utilities such as water, electricity, gas or council tax or if tenants will be responsible for these expenses separately. Your reasons for doing so may be influenced by the type of property (for example, if you rent a home of multiple occupation with a high tenant turnover, or you let to students) or to make your property more competitive.

You may consider including the internet as part of the rent. A reliable and fast internet connection is highly desirable for many tenants, especially with hybrid working becoming more popular. Look for a service that offers fast and dependable connectivity, and consider the cost and any data limits associated with the package. Also, make sure to communicate the terms of internet usage and any limitations to tenants to avoid misunderstandings.

Calculate expenses 

Determine all the costs associated with owning and maintaining the property. This includes mortgage payments (if applicable), maintenance and repairs, taxes, utilities (if you decide to include them), and any other costs. 

As a landlord, you're responsible for maintaining the property and addressing any necessary repairs. Factor routine maintenance costs into your overall expenses, although it may also be worth setting aside additional funds for unexpected repairs or emergencies that may arise during a tenancy.

Make sure you have a clear understanding of your complete financial obligations and factor them into rent charges.

Perform reference checks before agreeing on a tenancy

Thorough tenant referencing checks can help you steer clear of unreliable tenants, ensure you receive scheduled rent payments and avoid costly eviction or legal processes. 

Tenancy screening with include background checks, credit checks, employment verification. Contacting previous landlords for references can give clear indications of any past issues.

Use written lease agreements, and clearly outline the terms and conditions of the tenancy agreement in a written contract. 

Include provisions for rent payments, late fees, maintenance responsibilities, and any other important details.

Consider your current tenants before you put the rent up

If you are considering putting the rent up, take into account your current tenants’ financial situation. Increasing it too high may result in them having to move out if they can no longer afford to live there.

You would then have to find and screen new tenants, with a risk of a void period if you don’t instantly find someone suitable. Offering a competitive rate - but one that covers your costs - may encourage good tenants to stay. 

Consider rent guarantee insurance as a financial safety net

Rent guarantee insurance can provide cover designed to help protect landlords from the financial losses that can occur as a result of tenants failing to pay their rent.

This insurance can typically cover rent arrears and legal costs associated with the eviction of a tenant who has not paid their rent. 

Rent guarantee insurance can help landlords in a few ways:

  • By providing financial protection against unpaid rent, it can help to provide landlords with a financial backup if a tenant is unable to pay their rent.
  • By covering the cost of eviction proceedings, it can help landlords through the process of evicting a tenant.
  • By covering the cost of legal advice and representation, it can help landlords follow the correct procedures when evicting a tenant.

As can be the case with any insurance policy, landlords should carefully review the terms and conditions to ensure the cover is suitable for their needs.

Help is at hand – get in touch with Rentguard.

With vast experience handling insurance policies for a wide range of landlords, and with relationships with a number of leading insurers, Rentguard Insurance aims to simplify your insurance arrangements and help to protect your property, its contents, and your liabilities.

Get a quote online or speak to our specialist team on 0333 000 0169.

The sole purpose of this article is to provide information on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. 

Arthur J. Gallagher Insurance Brokers Limited trading as Rentguard and National Residential Landlords Association, an Introducer Appointed Representative of Arthur J. Gallagher Insurance Brokers Limited, accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein. 

National Residential Landlords Association is an Introducer Appointed Representative of Arthur J. Gallagher Insurance Brokers Limited, which is authorised and regulated by the Financial Conduct Authority. Registered Office: Spectrum Building, 7th Floor, 55 Blythswood Street, Glasgow, G2 7AT. Registered in Scotland. Company Number: SC108909. Rentguard is a trading name of Arthur J. Gallagher Insurance Brokers Limited.