A rent review is carried out during a tenancy to determine if the rent being charged is correct for the market value of the property. It is a way to regularly ensure that your income is appropriate as property prices increase. Increasing the rent will help keep you financially stable as mortgage rates change and insulate against economic issues such as rising inflation and costs of living. A properly completed rent review will make sure that your property is accurately valued and you can be certain that you are receiving the correct rental income.
What is a rent review?
In the private rental sector in the UK, a rent review is a periodic assessment of the rent charged for a property. It typically occurs at agreed intervals, often annually, and provides an opportunity for landlords to adjust rental rates in line with market conditions. The process involves evaluating factors such as local property values, demand, and any improvements made to the property. Rent reviews aim to ensure that the rental amount remains fair and competitive. When conducted properly, both landlords and tenants may benefit from this process. Landlords can keep their income in line with market trends, and tenants receive advance news of any potential increase with accurate reasoning behind it, fostering a transparent and sustainable rental arrangement.
How much can you increase rent by?
The most important component of a rent review is accurately assessing the true open market value of the rented property. When delivering news of the increase, the figure will need to be accurate or the notice could potentially be invalid. This could mean a lost opportunity to increase your income. Additionally, government guidelines require that any proposed rent increase must be “fair and realistic.” In this context this means that the proposed increase should be similar to the average rent of similar properties in the area. If you are looking to conduct a rent review then the best course of action is to seek advice from a professional with experience in the property industry. This will ensure that you get the correct figure and have peace of mind that everything is being expertly handled.
What goes into a rent review?
Completing an accurate rent review will require specialist knowledge not just of the property industry, but also of the local housing market. You will need to balance local prices with the costs the property incurs to ensure that you are still earning your desired income. This can be a time consuming and complex process but will ultimately be worth it to yield an accurate increase in your income. Additionally, you will need to be able to sensitively deliver the news of any rent increase to your tenants to ensure that you can make the changes you need without compromising your relationship. You will also need to be prepared for the possibility that the tenant will want to challenge or negotiate the increase and have an appropriate response prepared.
Can you conduct a rent review yourself?
It is possible for landlords to conduct their own rent reviews. However, due to the time and effort required to reliably gain the ideal result, engaging the services of a professional letting agent is highly recommended. A letting agent will be able to dedicate time to the task that landlords often struggle to find between managing their properties, careers, and other responsibilities. Years of experience conscientiously navigating rent increases with tenants and industry knowledge are also major benefits to ensuring that the process proceeds smoothly.
If you’re curious if you are receiving market-accurate rent and looking to expand your income, contact Pure Lettings. You’ll benefit from decades of collective experience and dedicated services delivered by a tight-knit team of property management experts. To get in touch or book a free, no-obligation consultation just call 01689 400100 or send an email to email@example.com.