Could Holding Out For A Higher Rent Actually Cost You Money?
A higher monthly rent sounds attractive, but it's not always the most profitable option. Sometimes protecting a reliable tenancy and avoiding an unnecessary empty period can leave landlords better off over the year.
When a rent review comes around, it is natural for a landlord to ask whether the rent should go up. Mortgage payments, insurance, repairs and other costs have all put pressure on rental returns, so an increase can seem like the obvious way to protect income.
But the purpose of a rental investment isn't simply to achieve the highest monthly figure. It is to earn a dependable return while managing costs and risk. Sometimes, that means recommending that the rent stays exactly where it is.
A higher rent is not automatically a better return
Imagine a landlord receiving £2,000 a month for a three bedroom house. The tenant pays on time, looks after the property and has been settled there for some time. At the annual review, the landlord considers an increase of £100 a month.
An extra £100 sounds worthwhile. Over twelve months, it adds up to £1,200. But just one month without rent would mean £2,000 in lost income at the existing rate. It would take 20 months of that £100 monthly increase to make up the equivalent of that one empty month.
That doesn't mean a £100 increase would cause the tenant to leave. It simply means the possible benefit should be weighed against the downside, especially when the tenant is already paying a strong rent for that type of property.
Look at what the local market is actually doing
Rental markets don't always rise at the same pace. One postcode may see strong demand for family houses while another has more properties available and tenants become more selective.
That is why a rent review should start with evidence, not an automatic percentage increase. Look at comparable homes that have recently let, not just the highest asking rents currently advertised. Consider the condition, parking, garden, location and size of those homes compared with your own.
A rent that was below market level two years ago could have caught up with today's market. Equally, a long term tenant may genuinely be paying less than a new tenant would. The right recommendation depends on the circumstances, not on a blanket policy.
A reliable tenant has financial value
It is easy to underestimate the value of a tenant who pays consistently, communicates clearly and takes reasonable care of the property.
If that tenant leaves, there can be more to consider than the empty weeks. You may need cleaning, decorating or repairs before the home can be marketed again. There could be marketing or letting fees and time spent organising access, referencing and a new move in.
None of those costs means you should avoid a justified increase. But they do mean that the headline rent is not the same thing as the money you actually keep.
Consider the tenant's position too
A rent review should be commercially sensible, but it should also be fair. A large increase that is technically possible may create unnecessary pressure on a tenant who otherwise wants to remain.
This doesn't mean every tenant should have a permanent rent freeze. Landlords need sufficient income to maintain the home properly and meet their obligations. But there can be real value in stability, particularly where the difference between the current rent and the local market is small.
A considered discussion is usually better than treating each annual review as an opportunity to demand the maximum amount.
What about the new rent increase rules?
Since May 2026, the rules for assured periodic tenancies in England require landlords to use the statutory section 13 process for rent increases, including the prescribed Form 4A and at least two months' notice. In general, rent can only be increased once a year and not during the tenancy's first year.
A decision not to increase today does not mean giving up the opportunity permanently. You can review the market again when appropriate and, if an increase is justified, use the required procedure and timing. The aim should be a rent that can be supported by local market evidence.
Sometimes the right advice is to leave things alone
At Keys & Lee, we believe rent reviews should protect a landlord's overall financial position rather than simply produce a higher figure on paper.
That might mean recommending an increase where a property is genuinely below market rent. It might mean modest adjustments over time. And where a landlord is already receiving a strong rent from dependable tenants in a softer local market, it may mean advising them not to increase it this year.
The right answer will not be the same for every property. What matters is considering the income you receive, the likely market rent, the costs of a change of tenant and the longer term return.
If you own a rental property in Romford or the surrounding areas, our lettings team would be happy to review its rental position or your wider portfolio free of charge. We can explain what similar properties are achieving and help you decide whether an increase, or simply protecting the income you already have, makes more sense.
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07969 638349
duncan.kaye@keysandlee.co.uk
