Rental increase advice

Posting on behalf of my parents. They have a rental property with tenants on a periodic tenancy. They have been there for over 5 years. They were not the best option for potential tenants but my parents aren't doing it for income and felt that these tenants would benefit the most in being offered the tenancy from their potential tenant options.

The tenants haven't had a rental increase in the entire time they have been there - they were hit hard financially by COVID and my parents wanted to give them a chance to get back on their feet. Due to the costs of repairs they see escalating when they do move out (the property hasn't been well looked after and the costs of repairs are likely to be more than the deposit) they would like to recoup some of the losses they will make on the property, so are looking to increase the rent.

Their current rent is £500pcm. The average rent in the town for properties of the exact same spec (decent but not pristine condition, same # beds, same property type) is £1100pcm.

What is a reasonable amount to increase rent by? They don't want to price the tenants out of the property but at the same time they haven't been great tenants and they need to start recouping costs. If they served notice then they would easily be able to get the £1100pcm rental amount, but they don't want to evict if they can help it.