Why Rent-setting is More Important Than Ever for Landlords Or The Importance of Rent-setting in the Era of Renters’ Rights

Why Rent-setting is More Important Than Ever for Landlords

Or

The Importance of Rent-setting in the Era of Renters’ Rights

Rent setting has always been a critical component of any successful buy-to-let.

Finding the sweet spot between charging enough rent to cover costs and make a return without alienating prospective tenants with high prices is fundamental.

And now, thanks to the Renters’ Rights Act, the rent-setting stakes have been raised even higher.

Under the new laws that came into force on May 1, landlords are banned from engaging in bidding wars or accepting rents above the advertised asking price.

Renters’ Rights also adds a layer of complexity to increasing the rent, should you decide later that it’s necessary to charge more.

Now rents can only be increased once a year, and you must provide at least two months’ notice.

Tenants can also challenge your decision via the First-tier Tribunal if they think the increase is above market rate.

So how can you ensure you set the rent at a level that is compliant, competitive and good for your property business?

Here are some useful tips to help you nail all three of these challenges.

Market knowledge

Landlords need to understand the local rental landscape. (Remember, if a tenant challenges you on a rent increase, you’ll need to demonstrate you understand the market rate.)

Do your research and consider how your rental compares to similar properties in terms of size, décor and location. It’s also wise to speak to a good letting agent who will have a detailed understanding of what other landlords in the area are charging.

Fixtures and décor

The standard of finish at your rental property will strongly influence how much you can charge. Tenants will pay a premium for modern kitchens and bathrooms. A well-maintained, landscaped garden or courtyard will also be a major drawcard.

Proximity to transport and amenities

Accessibility is a key issue, so factor in proximity to transport links, such as train stations, bus stops and major road networks, when evaluating how much rent to charge.

Nearness to amenities such as parks, restaurants, cafes and areas of outstanding natural beauty can also be important.

Cost of living

Don’t forget to consider also the broader economic context.

You need to balance your costs (which have likely risen in recent months) with tenant affordability (you don’t want to price yourself out of the market and end up with an empty property).

If you’d like to discuss rent-setting or get an update on the local property market, give us a call today on 0114 266 0660.