When can rent be increased in a tenancy? A guide to rent reviews

Typically, in private renting, the rent for a tenancy is established and agreed upon at the beginning of the tenancy period and specified in the tenancy agreement. However, there may be instances where the landlord considers raising the rent to account for inflation, increased cost of living, or property maintenance expenses. To learn more about rent increases in private residential renting, refer to this guide.

Is it possible for a landlord to raise the rent?

Landlords have the right to increase the rent charged to tenants, provided they adhere to the appropriate procedures and the proposed rent increase is not unjustified or unreasonable. The tenancy agreement should specify the process and timing for rent reviews. The general guidelines for rent increases are as follows:

  • The landlord must obtain the tenant’s consent if the rent increase exceeds the previously agreed amount.
  • The rent increase cannot be excessive or unfair, meaning the landlord can only raise the rent commensurate with similar properties in the area.

In the event that you receive a Section 13 notice and the proposed rent increase is excessive or unfair, you may challenge it and receive a fair rent determination by applying to the tribunal. For more information, refer below.

What are the ways in which a landlord can increase the rent?

A landlord can increase rent in several ways, including:

  1. Renewing the tenancy agreement The simplest way for a landlord to increase rent is to wait until the fixed term of the tenancy has expired, and then make a new tenancy agreement with the new proposed rent clearly stated. This approach is straightforward and does not require any special procedures. The landlord and tenant can negotiate the new rent amount, and if they agree, the landlord can simply include the new rent amount in the new tenancy agreement.
  1. Mutual agreement If the tenancy agreement does not contain clauses related to rent increases, and the landlord wants to increase the rent without serving formal notices, the landlord can ask the tenant to mutually agree to an increase. The landlord and tenant can negotiate the new rent amount, and if they agree, they should record the agreement in a rent increase agreement. This approach is simpler and more informal than serving a formal notice, but it is important for both parties to document the agreement to avoid any misunderstandings or disputes in the future.
  2. Using a rent increase clause If the tenancy agreement includes a rent review clause, the landlord can use it to increase the rent mid-tenancy. The rent review clause typically sets out how the landlord can propose a rent increase, and how much notice they need to give the tenant. The landlord should notify the tenant in writing, giving the new rent amount and the date from which it will take effect. The recommended notice period is at least 2 months. The tenant should then return the notice to the landlord with their name and signature to acknowledge that they have received and accepted the rent increase. It is important for landlords to ensure that the rent increase is not excessive or unfair and that it is in line with the current market rates for similar properties in the area.
  3. Using a section 13 notice If the tenancy agreement does not mention rent increases, or if the tenant is unwilling to agree to a rent increase, the landlord can issue a “Landlord’s notice proposing new rent” (also called a “section 13 notice”) to propose the new rent amount. The landlord must use a specific form (Form 4) and follow certain procedures, including giving the tenant at least 1 month’s notice before the proposed rent increase takes effect. The tenant has the right to challenge the proposed rent increase by applying to the First-tier Tribunal (Property Chamber), which can determine a fair rent based on market rates for similar properties in the area.

In summary, landlords can increase rent by renewing the tenancy agreement, mutually agreeing to a rent increase, using a rent increase clause, or serving a section 13 notice. It is important for landlords to follow the correct procedures and ensure that any proposed rent increase is fair and reasonable. Tenants should also be aware of their rights and can challenge a proposed rent increase if they believe it is excessive or unfair.

What is a section 13 notice and when is it used?

A section 13 notice is a legal notice used by landlords in England when they want to propose a new rent under an assured shorthold periodic tenancy. This notice can only be issued after the initial fixed term of the tenancy has elapsed. When a tenancy agreement doesn’t provide information or procedure on a rent increase, the landlord can only increase the rent by mutual agreement with the tenant or by serving a section 13 notice.

How much notice is required for a section 13 notice?

For weekly, fortnightly, or monthly periodic tenancies, at least one month’s notice is required. For yearly tenancies, six months’ notice is required. The notice period runs from the date of service of the section 13 notice, which is normally the day the rent is due. For example, if the tenant pays rent on the 10th day of the month, the date of the rent increase on the section 13 notice must be on the 10th day of the month.

What happens after a section 13 notice is served?

Once the notice has been served, the tenant has until the date of the rent increase to make a decision. If the tenant doesn’t do anything, the rent will automatically increase, and the tenant cannot dispute the rent increase.

However, if the tenant wants to dispute the level of the rent increase, they can apply to the First-tier Tribunal (Property Chamber) before the rent increase date given on the section 13 notice. Rent must be paid at the previously agreed rate until the tribunal or committee makes a decision.

Negotiating a rent increase

Negotiating a rent increase with the tenant may be more beneficial than imposing an increase, as the tenant may choose to leave the property, causing the landlord to spend time and money re-letting it. Additionally, finding suitable replacement tenants can be difficult, especially if the landlord had a good relationship with the previous tenants.

Therefore, it may be advantageous to negotiate a rent increase that both parties are happy with. One way to do this is to roll out the rent increase in incremental stages over a period of time, for example, an increase of £25 in the first six months and then an increase of £50 for the six months after that.

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