When you and your tenant sign a leasing contract at the beginning of a tenancy, it usually locks both parties into the agreement for a set period of time, whether that’s six months, a year or longer. There may be a break clause that allows either party to get out of the contract at an agreed point, but otherwise the tenancy will run for the specified time.
Then, as the end of the contract approaches, you’ll need to decide whether you want to renew with a fresh, renegotiated contract or alternatively, bring the contract to its close and re-let the property to a new tenant.
Most landlords prefer to renew the tenancy for a number of reasons. Firstly, renegotiating the contract and allowing the tenant to remain in the property means that you won’t have to go through the whole process of re-letting. So, no advertising, viewings, legal checks on new applicants or negotiating new terms with them.
Put simply, following all the numerous procedures of re-letting your residence from scratch is a lot of work, and landlords clearly find it more palatable extending the terms and avoiding all this bureaucracy.
Providing there haven’t been any serious grievances over the course of the tenancy, it’s fairly normal for tenants to wish to stay too. Of course, situations change, and some will move on, but if a renter needs a property to call home for the next your or three, data shows that the majority will decide to remain where they are.
Having established that both parties will choose to renew more often than not, this then makes the renewals period a critically important time of the tenancy. How do you keep the tenants satisfied with their terms whilst also taking into consideration rising market rental prices, the renovations carried out, and general economic inflation?
Registering as a landlord with Stirling Ackroyd will help anyone renting out their property in Central and East London. Our dedicated and experienced Renewals Consultants are committed to ensuring that your asset is both profitable and compliant. We do this by using all the knowledge and expertise we’ve gathered over 25 years of buying, selling and letting properties across our core areas, streamlining and developing our methods to provide the best possible service out there.
Stirling Ackroyd guarantees you’re fully compliant
We know more than anyone how important it is to stay up to date with the ever-changing legalities of keeping your asset compliant. There have been a significant number of changes in recent times, mainly enforced to target rogue landlords who provided unfit housing to powerless tenants. Now however, honest landlords are under pressure to remain compliant and adhere to all these changes with heavy fines and penalties should they fail to do so.
Tenant safety has been the number one priority and the 2004 Housing Act and the 2005 Regulatory Fire Safety Reform Order detail everything that landlords should know in order to keep their properties compliant.
Landlords should provide smoke and carbon monoxide alarms on each floor of the residence, and you should update your Gas safety certificate (CP12) every 12 months by carrying out the necessary checks. In addition, if there are furnishings in the property, they must meet the standards set out in the Furniture and Furnishings Regulation 1993.
Aside from all the safety regulations to which you must always adhere, the Landlord and Tenant Act 1985 covers a variety of areas in which the landlord is responsible for keeping the property in good order. In general, as a landlord, you are responsible for making sure that things like supply and drainage of water or heating systems are always in good working condition.
Finally, an often forgotten but nonetheless important requirement for landlords is the risk assessment for legionnaires. It’s your responsibility to identify any potential risks, and then take steps to make sure that they aren’t an issue.
Stirling Ackroyd employs a highly skilled team of compliance experts who have all the experience necessary to keep your property completely up to date. We know how to stay on top of the constantly evolving laws, and landlords with Stirling Ackroyd don’t have to worry about the extensive research involved just to be au fait with the intricacies. We’ll do all of that for you.
Negotiating a rent increase when renewing a lease
With all the work that’s involved in being a landlord, coupled with the fact that properties need constant care and maintenance, it’s normal to consider increasing the rent from time to time to keep up to the same level as other market comparables.
After all, using a standard year’s contract as an example, if anything goes wrong within the property throughout those twelve months, the tenant will legitimately fight their corner to get the issues resolved as quickly as they can. For you as a landlord, this means that the running of the property can seem like a full-time job, even when you’re not actually there.
Nevertheless, what’s important about raising the rental price is to be up-front with the tenant, giving them plenty of time to negotiate or to give notice if they think the new rent is too high.
No-one likes negotiating rent rises, but remember that it’s better to increase the rent by small increments over a number of years than to suddenly realise you’re charging well under market rate and hit your tenants with a substantial increase all at once.
There are, of course, advantages and disadvantages of raising the price of rent. Logically, if you’ve spent a considerable amount of money renovating the property over the course of the tenancy, thus bringing it up to a better standard, then it’s perfectly reasonable that the tenant may expect an increase in the rent. Again, if this can be justified with other comparables on the market, then you can push for a rent increase that truly reflects the quality of your home.
However, some tenants may decide to move even over the smallest of rent increases, so a hike in price that’s not materially useful to you is not always the best idea. If you’re going to lose a good tenant for a minimal extra amount, is an extra £20 a month that you’re anticipating really worth it?
In addition to this, if you’re not astute with the market comparables, you may inadvertently raise the price to more than what the market is asking. Clearly, your tenants will be disgruntled, and should they leave, a month or two without rent is much more damaging than the possibility of that £20.
Letting the experts do the letting
Happily, this piece doesn’t set out to disillusion and demotivate any landlords out there, and crucially, by letting your property with Stirling Ackroyd, you’re letting your property with seasoned experts who know the renewal and negotiating processes intricately.
To begin with, our database keeps track of which tenancies are coming up for renewal, so we always begin renegotiating the contract three months in advance. This gives us the leeway to assess your best interests; rental income in your pocket.
Our dedicated renewals consultants have all the necessary experience to renegotiate contracts and we’ll take care of the whole process for you from start to finish.
Book a free valuation of your property with Stirling Ackroyd today so you have a clear and up to date idea of where your asset stands in the market, then let us do the rest.