Index linking

  Ex plorer 13:19 04 Mar 12
Locked
Answered

I am trying to understand how it works. To work out an index link on property rent that cost £20 last year and what the cost would be to day.

Also to back track 17 years on a rent that cost £22. Rent today is still £22. The rent now needs to be updated on the 1st April. Is it possible by to find out what it would cost to day over that period of time had it been indexed linked.

probably not possible but if any one knows it would be appreciated. Looked on Google but I cant find a index table.

I am paying the rent and its been over looked for years and we want to sort it in a fair way if it cant be done we will come to an agreement in an other way.

  Fruit Bat /\0/\ 13:46 04 Mar 12
Answer

rent x RPI componded over 17 years

RPI back to 1948 here

  Forum Editor 14:47 04 Mar 12

There's a problem with index-linked rents, in that they can sometimes exceed the open market rental. That's because both the RPI and the CPI are based on tracking certain goods and services, but not property rentals.

There's also the problem of differing inflation rates.

In general, I wouldn't advocate index-linking for domestic property - far better to negotiate an acceptable rent, and proceed from there with a system of fixed rental increases at the review dates. It can be tricky, because you are both (landlord and tenant) predicting what will happen in the future, but if you know each other fairly well it can be the easiest solution.

You should be able to negotiate a figure for past years without recourse to complex calculations.

  Ex plorer 17:14 04 Mar 12

Fruit Bat /\0/\ Many thanks for the link I will work it out to the price I have in mind.

fourm member that's a handy link to have thank you.

Forum Editor That's handy information as I was unaware how it worked or what it was based on.

When advice is needed and help with links PCA always seems to have the people to help out, thanks again for your time.

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