HOW, WHEN AND IF TO RAISE THE RENT

With so much talk in the media of rising rents (certainly in London and the Southeast) you wouldn't be alone if you were itching to ask your tenants for an increase, but you need to be wary of appearing too greedy, which might drive decent tenants away.

Before you do anything, look at asking prices of similar properties in your area on rental sites like Rightmove and Zoopla to make sure that rents really have risen. Despite what you might have heard in the press, rents haven’t gone up across the board, even in London.

If you’re sure your property is worth more than you’re getting, then write to your tenant to suggest an increase, but make sure you do this at an appropriate time.

If they’re on a fixed-term contract without a break-clause, you’ll have to wait until that contract comes to an end before you can increase the rent. This rule applies even if you've recently improved the property, such as installing a new bathroom or replacing old furniture.

You should write to the tenant a couple of months before the end of their contact offering to renew the tenancy but at a higher price.

Where there is a break clause in the contract, you can increase the rent at the point of the break, but only with the tenant’s agreement and this can’t be within the first six months of the lease.

If you have a periodic tenancy (which rolls on week by week or month by month), you can increase the rent at any time as long as you give the tenant a months’ notice. You can only raise the rent once every 12 months unless the tenant agrees to further increases.

Of course, if you want to raise the rent more than once a year and the tenant doesn't agree, you have the option of ending the tenancy with two months’ notice and then you can look for new tenants at a higher rent.

However, you need to weigh up whether the extra income you might earn is worth the extra cost and hassle of finding a new tenant. Even if you market your property yourself, you’ll still have advertising costs and you might have to pay for a new inventory, check-in and check-out reports and a new tenancy agreement.

You’ll also have to give up some of your time to arrange viewings, sorting out the paperwork and settling in the new tenants. Is it really worth it? Some landlords prefer to forego any increase and use this as a tactic to persuade tenants to stay.

However, other landlords take the view that at a time when rents are rising it’s better to increase their rent by a small amount each time they renew a tenant’s contract as this is much easier for them to swallow than a whopping great increase every few years.

If you can demonstrate to tenants that the rent increase is reasonable and in line with other rents in the area, they should find it acceptable, but if you don’t want to lose them you should be prepared to negotiate, at least a little.

http://www.upad.co.uk/blog/2014/07/how-when-and-if-to-raise-the-rent/

Buy-To-Let Property Supremo Shuts Door On Housing Benefit Tenants

Sale of nearly 1,000 homes in Ashford and Maidstone area likely to net Fergus and Judith Wilson at least £100m

Britain's biggest buy-to-let landlords, Fergus and Judith Wilson, are to withdraw from the property business, selling their entire portfolio of nearly 1,000 homes in the Ashford and Maidstone area in a deal likely to net the controversial duo at least £100m – and spark speculation that property prices have peaked.

The Wilson's met with widespread condemnation earlier this year when it was revealed they had sent eviction notices to 200 tenants on housing benefit, saying they preferred eastern European migrants who default much less frequently than single mums on welfare. They first shot to prominence in 2006 when it was revealed that they had built up Britain's biggest buy-to-let empire, sometimes snapping up a property every day in the early part of the decade.

Fergus Wilson said a bounce-back in the local property market to above 2007 levels has prompted him to quit. In an email to The Guardian, he said: "We are selling up the whole lot! The market has recovered and passed the 2007 level.

"Who to? An intermediary is handling it. Is it China Money, Indian Money, Saudi Money? We will see. I am sure there will be much interest. It has been going on for just over three months and another three to run. I would like it to end up in English hands but it is a case of who will pay top dollar!"

He said existing tenants will be protected, with their rental contracts switched to the company or landlord that buys the portfolio. "We are protecting the Agents and Tenants who pick up a new client and landlord respectively. That is important to me. I will be broken hearted to say goodbye to my property portfolio but I cannot take it with me! It has been a lot of fun over the years."

Houses on the Park Farm estate in Ashford, where the Wilson's own scores of two- and three-bed properties, have jumped in value from a 2009 low of £150,000 to around £185,000, according to local estate agents Gould Harrison. "Over the last 18 months we have seen a strong recovery," said Nigel Gould, a partner in the firm.

Rents have also jumped, with new tenants of the Wilson's paying nearly £1,000 a month for a two-bed home compared to £725 in 2008.

Wilson did not disclose the price he is expecting to obtain for the properties, or the amount of mortgage debt attached to them. In 2010, he said the difference between his borrowing and the value of his properties "is around £180m, although it was as high as £225m." Since then, he has sold off some properties on a piecemeal basis. It is the second time the couple have attempted a trade sale of their portfolio, having been thwarted previously by the onset of the financial crisis.

Investors who are purchasing a rental portfolio are likely to value it on the yield – the level of the rental income – rather than the price individual houses would fetch at an estate agent.

After quitting the property market, Wilson said he will offer to help the government on housing policy.

"I might help sort out the Governments Housing Problem if they pay me enough money but I am not doing it for free! There is no magic wand to create overnight the number of houses required to overcome the Housing Crisis."

• Emma Lunn-  Saturday 4 January 2014, http://www.guardian.co.uk/theguardian