How to fight a rent hike in 10 steps

There's a lot of muttering right now from the landlord lobby that they'll be putting up rents because of changes to the tax regime and expected increases in interest rates. 

The threats would sound scarier if rents weren't already going up faster than inflation. The fact is many landlords will use any excuse to put up the rent when they get the chance. Many others value their tenants, and won't. 

If you face a rent hike, you don't need to accept it. We've put together a 3 minute video on what to do to avoid paying too much.

Or if you don't want to watch a video right now - here are the 10 steps:

1. Play for time - tell the letting agent you'll think about it and get back to them. Don't panic, but prepare to tell them you'll move out. That's your main bargaining chip.

2. Make sure you have your landlord's contact details. The suggestion of raising the rent tends to come from the letting agent and the landlord is more likely to lend you a sympathetic ear.

3. Start a list of reasons they shouldn't put up the rent. It will begin with you being a good tenant and the risk the landlord will take in getting a new tenant in - as well as the cost of putting the property on the market and not collecting rent for weeks or months. 

4. It takes some chutzpah from a crappy landlord to put up the rent. If you've asked them to make repairs and they've dragged their feet or straight up not done them, then you shouldn't have to pay extra for incompetence. Remind them of this and make sure you have copies of emails/photos of disrepair in case they need evidence.

5. Research what other properties are going for in your area and make a note of any that are cheaper than the proposed rent. If your landlord says their mortgage costs are going up, bear in mind that only one in three private rented properties has a mortgage, so there should be other landlords out there who aren't under that pressure.

6. A basic one - is it affordable? If the rent goes up, is there a risk you'd fall behind and leave the landlord short of cash? If someone else takes it could they afford the rent? Rent is considered affordable if it is less than a third of your income. Table 8 on this page lists average salaries for each local area. 

7. In case the landlord insists on putting up the rent, make sure they invest that money in the property: new carpets, fuel-efficient boiler, fixing the ignition button on the cooker. It's also an opportunity to ask if you can have a pet in return for a higher rent. Don't play this hand too early - this list is your back-up. 

8. Now phone your landlord - or send them an email or letter if you don't have their number. Tell them you'll have to move out if they put up the rent and go through the list of reasons why they should leave it be. If you don't get a response straight away, let the agent know you're waiting to hear from the landlord.

9. The landlord could refuse to reconsider. In this case make your demands for improvements.

10. The landlord could ask you for a counter offer. A good guide is the current rate of inflation. At the moment it's zero. Be prepared to compromise. 

If the landlord doesn't budge at all (which is unlikely) stay true to your word and start flat-hunting.

Still in doubt? Professional advice is provided by Shelter and Citizens Advice.

Showing 4 reactions

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  • commented 2017-02-28 15:16:06 +0000
    Gavin, if you really want a “level playing field” between landlords and buyers, surely this means that buyers should pay Capital Gains Tax at 28% when their houses increase in value, as landlords have to pay CGT. That’s fair, surely?

    I also don’t see why Section 24 is the removal of a tax relief: every other line of business is allowed to deduct its mortgage or rent costs from its profits before the calculation of tax, and a limited company that takes out a mortgage to buy a rental property is still allowed to deduct its mortgage interest costs. Section 24 is targeted at indebted private individuals investing in their own name, but cash buyers and corporate or partnerships are unaffected and can still deduct all their business costs.

    James, as a tenant it is your problem if the landlord can’t afford the Section 24 tax. She or he may be forced to sell up, possibly forcing you to relocate, and s/he may sell to a cash-buying private landlord, or an investment company, who are highly unlikely to be more flexible than your existing landlord on issues of rent. Private rentals have historically been largely the preserve of small landlords because the returns are, frankly, pretty paltry: larger business interested in property investment can make much better returns in residential development, commercial property or very expensive student housing located on-campus after doing a sweetheart deal with a university to secure the land; they also have far fewer voids and little risk of being lumbered with a dodgy tenant: the kind who never pays the rent, who trashes the house, who has all sorts of unsavoury “friends” visiting at all hours and disturbing the neighbours, and all the other things small landlords have to put up with. All that hassle of dealing with irascible tenants with permanent chips on their shoulders is something that the big boys really can’t be bothered with.

    I don’t regard private landlords as “greedy” in the least: they are either accidental landlords or they have realised that private property is one of the few places where an ordinary person can make better-than-cash investment returns without resorting to the stock market or taking a second job. Most of them understand property maintenance and know that their own skills and labour, usually valued at zero, can improve their investment and gives them a strong advantage over the expensive, bureaucratic cost structures of housing associations and private companies. If you’re an ordinary person in an ordinary job with a small mortgage on your own house, or someone coming up to retirement, and you have a few tens of thousand of pounds that you’ve saved or inherited, why would you leave that money sitting in cash or invest it in the uncertainties of stocks and shares, or god forbid buy an annuity with their terrible rates of return? The sensible thing for many people is to invest in a buy-to-let property, which you can improve and look after yourself, and which over time will become a steady-paying investment that can complement your other sources of pension income, and be an asset you can pass on to your children. Why is that greedy? What would you prefer these landlords do with their spare money?
  • commented 2017-02-25 18:45:36 +0000
    About time greedy landlords started paying their fair share. I would not get tax relief if I borrowed money to buy shares so why should property be any different? I’m a good tenant and if my landlord tried putting my rent up, I’d be moving out as soon as possible, leaving them to enjoy a nice long void period (the house I recently moved out of has been empty for 6 months so far). ’Round here, rents are falling.

    As a tenant it’s frankly not my problem if my landlord can’t afford the extra tax. The removal of upfront tenant fees will make it even easier and cheaper to move and encourage landlords to value their good tenants. I’m massively in favour of Section 24 :-)
  • commented 2017-02-20 17:21:11 +0000
    Lou Valdini Section 24 is just a partial removal of tax relief. First time buyers don’t get tax relief and it gives landlords an unfair advantage especially as landlords target first time buyer properties. Its designed to help level the playing field and only really targets those deeply indebted landlords using interest only mortgages as tax avoidance. If those landlords have to sell then those properties can go to first time buyers who rent making it rent supply neutral.

    Remember landlords have had it very good the last 7 years being bailed out by ultra low interest rates, QE and funding for lending. Their mortgage costs have fallen dramatically and yet these savings weren’t passed onto renters, just pocketed by landlords who often instead pushed rents above inflation instead.

    I think the real problem is that interest only mortgages remain for landlords and should be banned to truly level the playing field.
  • commented 2017-02-20 13:07:26 +0000
    Perhaps you could publish on here the typical impact of Section 24 on landlords’ taxation, using an example of a landlord with one property with, say, £3,000 mortgage interest, rental income £6,600 pa, management and operational expenses £2,000 pa, and other employment income of £30,000 pa. There are plenty of calculators out there, but I’m sure you will have this to hand. If the landlord’s tax will increase by £XX pa in 2017, followed by more in 2018, 2019 and 2020, then those will be the rent increases that need to be found. There is no choice, unless the landlord takes a massive drop in income to subsidise his/her tenants. This would give tenants some ‘real’ data on which to build their case for no or a reduced increase. Don’t forget, most landlords do not have vast property portfolios. Many are ‘accidental’ e.g. they are renting out because they’ve moved for work and expect to return. If a landlord cannot pay the mortgage, the property gets sold or repossessed, and the tenant will be evicted. It is likely many ‘small’ landlords will be forced to sell to the huge property companies, who have the cash to buy without a mortgage, and we all know what it’s like trying to negotiate anything with them.