Increasing the rent

[MikeAngelo]

I'm a bit of a reluctant landlord in that a friend of mine was homeless so with the help of a loan I bought a small flat in London in 1995 for him to live in.

He became unemployed in 2005 and began claiming housing benefit (he's never worked since, and is now 66). At first the Council increased the rent the following year, but since April 2006 the rent has stayed the same.

It's currently £130.40 per week, and I'm intending to inform the local Council I'm increasing it to £150. I have 2 questions:

1. Is the jump too much (i.e. all in one go - it's still way below the market rent for the area [Northolt]).

2. Is there a standard format I should use for writing to the council?

Thanks for any help.

[Richlist]

I have no idea of the answers to your questions but hopefully someone will be along shortly who can help.

I just wanted to say that I'm totally blown away by your generosity. You buy a house and let it to a friend in need at way below market rent for over 15 years.

Its people like you who should be on the new years honours lists......not people like Lorraine Kelly.

[Carryon Regardless]

The HB arrangement is between the T and the HB, the LL these days 'usually' only gets involved when there is issue with unpaid rent.

Your T makes the claim and the HB will award on assessment, this will take into account the average local area rents and will include the low value dross.

There are others with greater expertise here but it seems that what has become policy is to give the T ££'s and if the T is able to get a cheaper property he can pocket a profit, to a maximum.

In your case I would write to your T informing of a rent increase from 1 months time and he is then to approach the HB for an increase in award.

[Melboy]

The only thing I can see that should have been done over the previous years perhaps is that you should have staged the increases before now. £80 a month is a large one off jump in rent which may cause a large sucking of teeth at the benefit office.

From my (limited) experience of family members living in rented through the council organisations the rent increases occur every 2 years at or around a 5% increase.

Mel.

[MikeAngelo]

Thanks for your replies.

I've printed the Section 13(2) form which I'll complete and give to the tenant.

The going LA rate is apparently £169 per week for the postcode - should I ask for that or stick at £150?

Thanks again.

Saint Mike.

[LLAW96]

I take a slightly different view, my main concern here would be what type of tenancy agreement did you enter into? Firstly the tenancy pre dates march 1997 in this case did you serve a section 20 notice? if not we are dealing with an assured tenancy rather than a shorthold assured. If this is the case then the rent increase will be determined by either a clause in the agreement which will stipulate how when and by how much the rent will increase. In default of such a clause then any increase would be governed by s.13 Housing Act 1988. Do not be confused beteween what a local authority will pay in housing benefit and market rent, it will be likely that the market rent will be higher than local housing benefit rates.

If you did serve a section 20 notice and your tenant is holding the flat under an assured shorthold tenancy, then check whether the agreement has a clause delaing with rent increases or simply issue a new agreement with the new rent (I am assuming that your current agreement has expired on the facts). Any challenge to the new rent cant be referred to the rent assessment committee for a determination of a market rent.

[Melboy]

Yes, precisely what law has said........although I have no personal direct experience of DSS or HB operations I am of the view that no local authority will allow you to just hit your tenant with a massive rent increase becuase you have not completed a managable for the tenant staged increase in rent over the previous years.

Anyway your best advice will come from the people you have to deal with rather than us on this forum so make that call and please let us all know how you get on.

Regards Mel.