Private rent increase

[BR36]

Hi, I rent out a property which is subject to a fixed term (2 years) tenancy agreement. I’ve had the same tenants for the last 5 years and have never increased the rent which is now significantly below local market rates. I have contacted the tenants to advise that when this fixed term ends, I will be increasing the rent to a figure that I’d be happy with based on two indecent estate agent valuations I’ve had. Whilst it’s a significant increase (+£175) on what they’ve been paying for the last 5 years, I have proposed the lowest of the independent valuations I received on the basis that I want to be fair and reasonable and indeed, I’d like to retain them as tenants. The response I’ve received is quite aggressive really, they simply can’t afford to pay any more than they currently pay but initially said they could ‘stretch’ to +£75 per month but not a penny more. They’ve now replied saying they cannot and will not pay any increase and intend to speak to Citizens Advice and the local council about it. I’m pretty sure I’m acting legally by propsing an increase at the end of the current fixed term and I’ve been very realistic in my expectations on rental value based on independent valuations. The increased interest rates mean I simply must increase the rent so if push comes to shove, what should I do. They have three children so I have zero intention of trying to ‘evict’ them if they still refuse the increase but it will get to a point where I have to say I’m not renewing their tenancy. I’ve said I’ll give them a short term (I’m thinking up to 2 months) short term TA so that they can get the advice they need on whether I’m acting legally and realistically but if we can’t agree, I assume I’ll need to give them notice. Any thoughts please