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Increasing rent: the one fact every buy-to-let landlord needs to know

2-minute read

Increasing rent: the one fact every buy-to-let landlord needs to know
Mollie Millman

Mollie Millman

25 July 2016

It's not just tenants who are nervous about their rent increasing - many landlords are too. But there is one fact that can make life a little easier.

The risk of a rent increase

For many landlords, the rent will cover part - if not all - of the mortgage they have on their buy-to-let property.

If that rent disappears, the responsibility of paying the bank immediately shifts onto their own income or reserves - and that defeats the objective of their property investment.

It means landlords with steady rents are unlikely to want to upset the apple cart. A rent rise may push a tenant to become so unhappy that they decide to end the tenancy and move out.

And whilst landlords can follow best practice - we like to think our seven tips for increasing your tenants' rent are especially good - there'll always be a risk involved.

Increased rent vs. the cost of moving

However, there is one crucial factor that is worth keeping in mind. And this is that a small increase in your tenants' monthly rent may not come anywhere near the cost of moving.

Latest research suggests that it costs almost £1,200 to move from one rental property to another. This covers deposits, agent’s fees and removal costs.

A £20 increase in monthly rent, meanwhile, would only cost a tenant £240 extra each year.

On this basis, it would take the tenant five years of staying put before they spent the same amount of money as they would moving.

And what about the London rental market?

Well, the sum is even greater in London, according to the research by flat share website Spare Room.

It found that those in the capital spend £2,043 on moving from one rental property to another. A large proportion of this is the deposit, where the equivalent of six weeks rent upfront is often required.

Other common charges include administration costs and fees for tenancy agreements and credit checks. Many of these are non-refundable, the research found.

The market has become so competitive in some areas that so-called ‘reservation’ fees are being charged.

Non-refundable fees are common

The research also claimed around three quarters of tenants must budget for fees, most non-refundable, with more than a fifth charged fees for reserving a room.

It also found that almost three out of 10 Londoners pay upwards of £300 in fees, while 15 per cent pay more than £400.

With such high charges becoming increasingly commonplace, landlords should feel reassured that a relatively small increase in their tenants’ rent will be viewed as less of an issue.

Matt Hutchinson, director of, said: “The high cost of moving means that flexibility - one of the main benefits of flat sharing - is starting to suffer.”

Have you increased your tenants' rent recently? Tell us about your experience below.

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