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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.
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:
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.
A landlord can increase rent in several ways, including:
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.
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.
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.
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 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.