When we paid a letting agent to advertise and manage our studio flat rental we were guided by their advice on how much rent to charge. During the 3 years they were acting for us we put up the rent once, between tenants, by £20 per month (about 4.5%). Last time we needed a new tenant we used OpenRent, and put the asking price up by another £10 per month. The price we now charge is exactly the same as the median rental value given for the address on Zoopla (I'm not quite sure how this works though - is it a recommendation or just a quotation of what is actually being paid?).
We were overwhelmed by the number of responses we got very quickly after advertising and had several offers of a higher rent from people who wanted to jump the queue. To be honest we found this part of the process quite stressful and it made us realise that part of what you pay the letting agent for is to do the "dirty" work and get you the best price. It also made us realise that we wanted to do things fairly, treat the prospective tenants properly and keep our word when we had accepted an offer . We could certainly have got more money if we had played people off against each other.
My son lives in a very similar studio rental in London for which he pays £900 per month which is exactly double the rent we charge. He is currently negotiating to extend his contract for another year. The letting agent told him yesterday that they propose to increase the rent by over 10% to £1,000. He has gone back to them and said he is prepared to pay an extra £55, but if this is not accepted he will look elsewhere. I think he has done the right thing. He could stretch himself (very thinly) and pay the extra 10% but it simply doesn't feel right that a landlord who has had his rent on the dot from a very reliable tenant should "take advantage" and attempt to get every last penny out of him that he can. It feels like a bit of a kick in the teeth.
I know that rental prices are determined by market forces but I also believe landlords have a responsibility to be fair, see their tenants as individuals, not just commodities and appreciate the fact that someone who they have relationship with (because that is what a landlord/tenant interaction is) is not going to be encouraged to stick to their part of the bargain with good grace if they feel that the landlord simply sees them as a "cash cow". My son's landlord has always been friendly, has given him home made wine and chats with him whenever they meet on the stairs. When he talked with him in person about extending the contract earlier in the week there was no mention of a rent increase. There is no doubt that the letting agent is responsible for advising him that he could squeeze more out of the rental if he tried (after all he gets his cut). My son does not object to paying a bit more, he understands that the landlord needs to make money, it is the steep hike that is the problem.
Should there be some kind of rules about how much the rent on a short-term tenancy can rise? What are the responsibilities of landlords in all this? Having seen the situation from both sides I believe that the sooner we have less people using bad letting agents the better, as re-introducing the personal touch into the situation is far more likely to produce a civilized settlement between the two parties. Unfortunately not all tenants are reliable and landlord protection is definitely needed, but too much reliance on third parties who have a very "cold" and one-faceted business model regarding rentals means there is a strong bias against the tenant.
In a similar way that vegetarians say you should only eat meat if you are prepared to kill the animal yourself, maybe you should only put up the rent by an amount you would be happy to look the tenant in the eye and negotiate yourself. Business needs the personal touch :-)