As the cost of living in the UK continues to rise, everyone is feeling the pinch. Rent increases are becoming increasingly common across the country, with many landlords opting to raise their monthly rent in order to keep up with inflation and other market forces.
In this article, we look at the rules regarding increasing the rent, including the correct processes during a tenancy and differing rules across England Scotland and Wales, plus what tenants can do if they disagree with a proposed increase.
- What is a rent increase?
- Why do landlords increase rent?
- How often can landlords increase the rent?
- What does a typical rent increase clause look like?
- How much notice does a landlord have to give to increase my rent?
- Can a landlord increase rent in the middle of a tenancy?
- Can tenants refuse to pay a rent increase?
- Can tenants challenge or negotiate rent increases with landlords?
- What are the rules for rent increases in Scotland?
- What are the rules for rent increases in Wales?
What is a rent increase?
A rent increase, or ‘rent variation’, is a change in the amount of rent that a tenant is required to pay to their landlord. Typically, a rent increase occurs when the landlord decides to raise the rent because of changes in the local rental market, inflation, or other factors.
The landlord may give the tenant notice of the rent variation in writing, usually in the form of a letter or a new lease agreement.
Tenants who receive an increase notice may choose to accept the new rental rate and continue renting the property, negotiate with the landlord for a lower increase, or decide to move out and find a new rental property.
Why do landlords increase the rent?
Landlords increase rent for a variety of reasons. One common reason is to keep up with the market rate and remain competitive in the rental market. For instance, if the market rate for similar properties in the area increases, a landlord may increase the rent to match that rate.
Additionally, landlords may increase rent to cover their own increasing costs, such as property maintenance and repairs, property taxes, and insurance premiums. In some cases, landlords may also increase rent to reflect improvements they have made to the property, such as renovations or upgrades.
However, it’s important to note that landlords must follow the proper legal procedures when increasing rent, and any increase must be reasonable and not discriminatory against tenants.
How often can landlords increase rent in the UK?
In the UK, landlords can increase rent once the fixed term of a tenancy agreement has ended and the tenancy has become a periodic tenancy, which means that the tenant is renting on a month-to-month or week-to-week basis. The landlord must provide written notice to the tenant of the rent increase at least one month before the increase takes effect.
The amount of the rent increase is at the landlord’s discretion, but they must ensure that the increase is not discriminatory and does not breach any legal protections for tenants against unreasonable rent increases. Rent review amounts are normally specified in the tenancy agreement or can be linked to an established index, such as Retail Price Index (RPI) or Consumer Price Index (CPI).
In addition, if the rental property is subject to a local authority licensing scheme or rent control, the landlord must comply with any additional requirements or restrictions on rent variations that may apply.
It’s worth noting that during the fixed term of a tenancy agreement, landlords cannot increase rent unless there is a clause in the agreement that allows for rent increases or the tenant agrees to it.
Is your tenancy up for renewal?
If your fixed term is coming to an end, you may be thinking about increasing the rent. If you’re not sure what to charge, you can get an instant rental valuation or book a call with one of our Valuations Advisors. If your tenancy is due for renewal soon, there are other considerations besides the rent. We recommend doing a few things to prepare:
- Confirm that your tenant wants to stay in the property
- Decide whether you’re renewing onto a fixed term or going onto a rolling periodic
- If you’re renewing on a fixed term, arrange a new tenancy agreement
- If your tenants are staying, arrange an end-of-tenancy checkout or mid-term inspection
- Book any safety checks that are due, such as a Gas Safety Check or electrical inspection
If you are a landlord with lettingaproperty.com, our Renewals team can help you arrange all of the above. Get in touch here.
What does a typical rent increase clause look like?
A typical rent increase clause in a tenancy agreement might state something like:
“The rent payable under this tenancy agreement shall be £XXX per calendar month. The landlord reserves the right to increase the rent payable under this tenancy agreement after the fixed term has ended and the tenancy has become a periodic tenancy. Any rent increase will be communicated to the tenant in writing at least one month before the increased rent becomes payable.”
The specific language used in the clause may vary depending on the individual tenancy agreement and the jurisdiction where the rental property is located. It’s important for both landlords and tenants to read the tenancy agreement carefully and understand their rights and obligations regarding rent increases and other terms of the tenancy.
How much notice does a landlord have to give to increase the rent?
In the UK, the amount of notice a landlord must give for a rent increase depends on the type of tenancy agreement in place. For assured shorthold tenancies (ASTs), the landlord must give the tenant at least one month’s written notice before increasing the rent.
The notice must include the new rent amount, the date it will take effect, and a statement explaining the tenant’s rights to challenge the increase through a rent assessment committee in England or a rent officer in Scotland or Wales.
It’s worth noting that if the tenant disagrees with the proposed increase, they can challenge it through the relevant rent assessment committee or rent officer within 21 days of receiving the notice. The committee or officer will then determine if the proposed increase is reasonable based on local market conditions and other factors.
Can a landlord increase rent in the middle of a tenancy?
If the tenancy agreement has a fixed term, the landlord cannot increase the rent during that period unless the agreement specifically allows for it. If the tenancy has become periodic (rolling monthly or weekly tenancy), then the landlord can increase the rent after giving the tenant the required notice period.
Can tenants refuse to pay a rent increase?
If a tenant disagrees with a proposed rent increase, they cannot simply refuse to pay it without risking eviction for non-payment of rent.
Tenants do have the option to challenge proposed rents if they believe them to be unfair or unreasonable, but must follow the correct process.
Can tenants challenge or negotiate rent increases with landlords?
If the tenant disagrees with the suggested rent increase, they can try to negotiate with their landlord to find a mutually agreeable solution, such as a smaller increase or a longer period to ‘phase in’ the increase.
If negotiation is not an option, they can challenge it through the relevant rent assessment committee or rent officer within 21 days of receiving the notice. The committee or officer will then determine if the proposed increase is reasonable based on local market conditions and other factors.
Tenants can seek legal advice from a housing solicitor or local housing advice service if they believe their landlord is acting unfairly or illegally.
What are the rules for increasing rent in Scotland?
In Scotland, there are more robust rent control measures in place. Private landlords can only increase rent once per year, and they must give tenants at least three months’ notice before doing so. There is also a system of Rent Pressure Zones, which are areas with high rental demand where landlords can only increase rent by a maximum of inflation plus 1%.
What are the rules for increasing rent in Wales?
The Renting Homes (Wales) Act 2016 introduced in December 2023 brought in many changes for landlords and tenants in Wales, including new standard occupation contracts and changes to notice and eviction rules.
Under the new legislation, landlords can increase the rent once a year. Landlords are required to give at least two months’ notice for this and must use the correct government form: Notice of variation of rent: form RHW12.
So, should I put my rent up?
When landlords ask us if they should increase rent, we ask them to consider their reasons why. If you have a good tenant who takes care of the property, increasing rent without a real need to do so may be more hassle than it’s worth. If your tenant can’t afford the increase, they may move out, resulting in advertising costs and void periods that may not make putting the rent up worthwhile in the long run.
Of course, the cost of living crisis is affecting everyone – landlords and tenants alike. If you are able to maintain your current rent amount and keep a sustainable income, we recommend doing so. However, mortgage hikes and skyrocketing energy prices have forced many landlords to take action. Sometimes, a rent increase is the only option to make the numbers add up.
Are you a landlord considering raising your rent? If you’re wondering what you should be charging, get an instant rental valuation using our free online tool. For a more accurate assessment, book a call with one of our Valuations Advisors – they’ll provide a free report and price recommendation based on detailed property information and current market factors.