‘My tenants have lower bills thanks to me – so can I charge more rent?'
Dear Moral Money,
I am a landlord, renting out a three-bed in east London to young graduates. They have lived there for three years now and we get on very well.
They have never missed a rent payment and have looked after the property in the time they have lived there. In turn, I have responded promptly to any maintenance issues and have never raised the rent, even as rates in the area have crept up.
Over the past two years, I’ve also slowly but surely been making the property more energy efficient. At this point I’ve spent around £10,000 bumping the property’s energy performance certificate rating from E to C.
Everything I did has had a positive effect on the tenants’ energy bills. While the price cap increase means they are still paying more than they did last year, my improvements mean they’re paying less than those renting elsewhere in the capital.
I am still paying off the mortgage and have to claw back the cost of these green modifications. Given my tenants are relatively saving on energy bills, can I raise the rent in line with the money I spent?
If I do, I am worried my tenants will no longer be able to afford to live there. But with my own energy bills soaring and a mortgage to pay off, it seems like a no-brainer. What should I do?
AD, via email
Dear AD,
It is certainly a shame that making your property greener has come at such a high personal cost to you. Despite the Government’s drive for net zero, homeowners like yourself more often than not foot the bill for the improvements necessary to raise a property’s EPC rating – and a rating of C is as good as you’re likely to get in an east London property without spending considerably more.
Your decision to get ahead of the game and make your home more energy efficient, however, will pay off in the long run. Conscious renters are becoming more discerning about properties’ EPC ratings, particularly in light of the current cost of living crisis, so sorting that sooner rather than later was a good call.
Similarly, if you ever wish to sell the property, data from Rightmove shows energy efficient homes are increasingly able to command higher asking prices than those that will require improvement. In time, your investment could end up being a drop in the ocean.
It seems you have been very charitable to your tenants by not raising the rent on the property, particularly if rents in the area have risen. Your property is an investment, after all, and you are perfectly entitled to increase the rent if it is in line with market values in the area.
But as you say, an increase could force your tenants out – and good tenants are hard to come by. It is an undeniably bleak time to be a 20-something renter: a demographic grappling with rents that were already very high, inflationary pressures, soaring energy bills and stagnant wage growth.
You are right in that raising the rent on your property will force your tenants to make drastic changes to their lives, which could possibly include moving out. But when the time comes to make a decision, it is worth considering what your long term aims are with the property, and what will be the smartest course of action from a financial perspective.
In any case, your tenants will one day move out of the property of their own accord – and there would be nothing to stop you raising rents after the fact if sentimentality is the only thing stopping you. But remember you are a landlord, not a charity, and ultimately this necessitates being the bad guy once in a while.
What do you think? Let us know in the comments section below and by emailing moralmoney@telegraph.co.uk
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Last Moral Money: 'My elderly neighbour is breaking the hosepipe ban to fill a paddling pool – can I report her?'
Dear Moral Money,
As I’m sure you’re aware, we’re in the midst of one of the most prolonged periods of drought in British history. The endless days of sun, while pleasant, have turned my lawn a rather sickly shade of yellow – not least because my local water company just enforced a temporary hosepipe ban.
I’ve resigned myself to the ban, because such measures are put in place for a reason and our community clearly needs to conserve water. But to my increasing irritation my elderly neighbour has chosen to ignore this.
Every day, she fills up her (recently purchased) paddling pool using water from her hosepipe for her grandchildren and her dog. They splash around in there all day, making an infuriating amount of noise, ruining my concentration as I work from home.
At the end of the day, my neighbour tips the water onto her lawn, which unsurprisingly has not yellowed to the same degree as anyone else’s, ready for her to fill it again the next morning.
As I have respected the ban, I can’t help but feel angry that my neighbour, with whom I usually get along very well, is flouting the rules. I never thought the sight of a paddling pool could ever fill me with this kind of white hot rage. The splishing and the sploshing; squealing now grates on the inside of my brain like nails on a chalkboard.
I want to report my neighbour, but know the consequences include a fine of up to £1,000, which, being a pensioner, I am sure she cannot afford. She is also looking after her grandchildren for free, while her son works, and I do not necessarily want to spoil their fun or ruin their summer. But the anger is building inside of me. What do I do?
SJ, via email
Poll results: What should our reader do?
Ignore what the neighbour is doing: 34pc
Ignore the paddling pool but ask them politely to keep the noise down: 40pc
Confront the neighbour about the paddling pool: 11pc
Report the neighbour to the authorities: 11pc
Other: 4pc
