Waterlooville Rental Prices Increase Over Previous 12 Months
When was the last time you checked if the rent you are receiving is in line with the area average? Many Landlords can’t remember what rent their tenants are paying, do you know?
Over the last 12 months rent have increased by 1.5% from £1038PCM in quarter 1 of 2018 to £1054pcm in quarter 1 of 2019. I expect to see this increase slightly before quarter 1 of 2020 giving the tenant fee ban time to affect tenancies and an increase again by quarter 1 of 2021 once the tenant fee ban has impacted those existing tenancies.
The below chart shows how rents have steadily increased across the board on all properties.
Please note the above rents are an average so if your property is quirky or outside of the standard average property size you will need to do specific research for your property.
Comparing new available property to the rental market in March 2018 to March 2019, I found a 24.6% drop in new properties coming to the market. There were 81 new properties in March 2018 compared to 65 in March 2019.
The average yield has remained steady for a Waterlooville property, going from 4.92% in March 2018 to 4.84% in March 2019.
What rent increase is acceptable?
My advice to clients is a maximum of £50 per calendar month increase. This steep increase would only be for those properties where the rent has fallen well behind market value. If your property isn’t far off what it should be achieving, but you haven’t had an increase in a few years and feel the property warrants one, I would recommend a small increase of anywhere between £10-£25pcm. Getting the top monthly rent for a property isn’t as important in the mid to long term as finding and looking after good quality tenants who are paying a fair rate.
How to increase the rent
Fixed term tenancy:
First of all please remember this can only be done at the anniversary of the tenancy i.e when the fixed term of the tenancy is due to end and you’re due to renew for a further fixed term. To allow time for negotiation etc. I would advise contacting your tenants roughly 2-3 months before the tenancy is due to expire, make sure the tenants situation hasn’t changed, they wish to renew for a further fixed term and at this point discuss with them the rent increase you are proposing going forward for the next fixed term contract. Most tenants will say they need to think the increase over, don’t be alarmed by this, what this normally means is they need to discuss this with their partner, do some financial calculations and research properties in the area similar to theirs.
To be able to increase the rent on a periodic tenancy you will need what is called a Section 13, it comes with notes on how the form is to be completed. Tenants need to be given one months notice of the rent increase, if you can give more notice tenants do prefer this.
Once an increase has been agreed by all parties make a note of when the increased rent will come into affect and check your bank where the rent payments goes, making sure the tenants standing order has been increased to reflect the new rent. This is something that is over often overlooked and then picked up 2/3 months down the line after the increase took affect.
If you have any questions on increasing rent or any other property related questions please don’t hesitate to get in contact.