RPZ rent increase calculator

G

Greenbook

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I am planning on increasing the rent in a property. I plugged in the dates and rent to the RPZ rent calculator. I am getting a HICP figure of -.02% and a note saying no increase is permitted.

Does anyone have any idea what is going on or how this is arrived at? As far as I know, inflation is still increasing, albeit at a low rate. So while I expected an increase below 2%, I did not expect 0%!
 
It’s possible depending on when rent was last set. The HICP index is lower in November 2024 than any of the three months September to November 2023.
 
Dr Strangelove said:
It’s possible depending on when rent was last set. The HICP index is lower in November 2024 than any of the three months September to November 2023.
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Thanks. So are you saying that if say Dec 23 HICP is -.1% and Dec 24 HICP is +.1%, it is zero, but if Jan 24 is 0% and January 25 is 2% then the increase is 2% ie. it is a direct comparison between when the rent was last set and when it is being reset.
 
The HICP index is the level of prices in the economy. It is an index number like 118.2.

HICP inflation is the rate of change in the index over time, usually 12 months. It is expressed as a percentage like 1.3%.

The RPZ rent calculator is the percentage change between the most recent HICP index level and the HICP index level which applied when you last set the rent. This percentage can be positive or negative, and can be calculated over a period no shorter than 12 months.

The RPZ rent calculator is accurate to my knowledge. I won’t bore you with the reasons but if you wait until January 2025 it will almost certainly produce a positive increase.
 
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Dr Strangelove said:
The HICP index is the level of prices in the economy. It is an index number like 118.2.

HICP inflation is the rate of change in the index over time, usually 12 months. It is expressed as a percentage like 1.3%.

The RPZ rent calculator is the percentage change between off the most recent HICP index level and the HICP which applied when you last set the rent. This can be positive or negative, and can be no shorter than 12 months.

The RPZ rent calculator is accurate to my knowledge. I won’t bore you with the reasons but if you wait until January 2025 it will almost certainly produce a positive increase.
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Thanks, will do that.

This seems very complicated. Are people aware of the intricacies of this. I think alot of landlords just multiply by 2% for one year, 3% for a year and a half etc. when as I found out, the increase may well be 0%! There are serious consequences for overcharging.

Also, how sustainable is this if you have long periods were the increase is 0% or near to it. It is a rent freeze in effect
 
Dr Strangelove said:
It’s very complicated by design. Complain to the politicians who dreamed it up!

I am not a big fan of the RTB but their calculator is easy to use and landlords don’t have to think too hard.
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Agreed, the calculator is easy to use. I just plugged in my current rent and my dates.

It is lack of awareness of this that I am thinking about. I don't think a lot of landlords are aware of the impact of HICP and think the increase is 2%. That your increase may effectively be zero or so small that it is not worth bothering with should be publicised much more by the RTB. Landlords will use 2% and get caught out later.
 
Greenbook said:
It is lack of awareness of this that I am thinking about. I don't think a lot of landlords are aware of the impact of HICP and think the increase is 2%. That your increase may effectively be zero or so small that it is not worth bothering with should be publicised much more by the RTB. Landlords will use 2% and get caught out later.
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It's really up to landlords to run their business properly and in compliance with the relevant governing rules and regulations and to keep abreast of these.
 
ClubMan said:
It's really up to landlords to run their business properly and in compliance with the relevant governing rules and regulations and to keep abreast of these.
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Indeed it is. But that said, I suspect that many are unaware. I would found it very hard to believe that my increase was 0% when there has been no rent change for 18 months and the rent is already low.

Another question is how sustainable this is - assuming inflation remains at this level as it well might, there will be no increases or miniscule increases going forward indefinitely. If inflation later increases massively, the increase is still 2% after a period of no rent increases at all.

Also, why on earth are 'experts' like Rory Hearne looking for rent freezes, this is as close to one as makes no difference.
 
Greenbook said:
I think alot of landlords just multiply by 2% for one year, 3% for a year and a half etc. when as I found out, the increase may well be 0%! There are serious consequences for overcharging
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I think the vast majority of landlords will be doing this properly. Maybe you need to worry about your own practice rather than others. To serve a valid notice of rent review you must attach a copy of the calculation from the calculator to your notice. It's fairly basic stuff.

What have you been doing?
 
llgon said:
I think the vast majority of landlords will be doing this properly. Maybe you need to worry about your own practice rather than others. To serve a valid notice of rent review you must attach a copy of the calculation from the calculator to your notice. It's fairly basic stuff.

What have you been doing?
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Since the 2%/HICP came I haven't increased at all - it is not worthwhile. I used the calculator because in another thread it was recommended to me that I take my increases; I was then very surprised when the calculator gave me precisely 0%!
 
Greenbook said:
Since the 2%/HICP came I haven't increased at all - it is not worthwhile. I used the calculator because in another thread it was recommended to me that I take my increases; I was then very surprised when the calculator gave me precisely 0%!
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I don't see how you arrive to 0%. The cap of 2% was put in December 2021. If I put a last rent review in December 2021 in the calculator, I get a 6% authorised increase.
 
With this hybrid 2% or HICP, whichever is lower rule, does it not make sense to always hold off on rent increases until there has been a period of "steep inflation" in the previous year that outstrips the cumulative 2% per year? Locking in at a rate lower than 2% just to increase the rent on the anniversary of the lease etc. doesn't strike me as a good idea. What am I missing here? I know we are not guaranteed these periods of steep inflation at all so there is that element of risk I suppose but forgoing a tiny increase seems like a reasonable punt in the hope of getting a slightly less tiny increase lol. We are talking small beer in either case.
 
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