Each year around Feb/March I investigate what the HB rates are for my area and then obtain confirmation from the local council. Did this in 2020 in mid February and the rates were due to increase by 1.4% for the first time in 4 years. Seemed a reasonable increase.
I am now doing the same, to learn that at some point during 2020 the LHA rates for my area increased between 9 & 14% making my rents significantly below the LHA, this would also explain why local market rents have rocketed in the last 6 months. I thought I had a good relationship with my local council but clearly they didn’t want to share this info!
This now leaves me in a sticky position regarding my annual rent increase at 1st May. For example a 2-bed monthly LHA last year was £622 and is now £678. Market rents for a 2-beds are currently anything up to £750 and I am currently charging £640.
I use the Guild’s ASTs, what am I reasonably allowed to do?
For new tenancies I realise I can set the rent according to LHA and market factors.