When it comes to making a rent increase on a buy to let property, it’s not only tenants who feel nervous. Many landlords rely on the steady income provided by renting out a house to service their mortgage costs or other commitments, so few take the decision to increase the rent and potentially upset their tenants…
Fixed term or Periodic tenancy?
Before increasing the rent, you must check to see if you are in either a fixed term agreement or a periodic tenancy. For a periodic tenancy (rolling on a week-by-week or month-by-month basis) you can’t (in most cases) increase the rent more than once a year without your tenants consent.
A provision for a rent increase can be inserted within the tenancy agreement at the start. If this provision is not made within the lease, then the landlord is not entitled to increase the rent during the fixed term (he must wait until the fixed term has expired).
Check your tenancy agreement before proposing a rent increase
You should have a read through your tenancy agreement as there may be provision for rent reviews. The tenant would have been made aware of the rent increase in advance by the landlord. If there is no mention of a rent review in the agreement and the tenant it not mutually agreeing to the rent increase then the landlord should issue a rent increase notice – Section 13 (only in periodic tenancy)
How much notice should I give before making a rent increase
A landlord should give the tenants sufficient notice before increasing the rent. When a tenant pays the rent monthly, then one months’ notice should be given.
How much can I increase my rent by?
There is no set amount that a landlord can/ cannot increase the rent by. However, it must be considered fair and realistic, ie in line with average local rents. If the tenant feels the increase is unfair, they may present their case to the Rent Assessment Committee who may decide what rent the landlord could reasonably expect for the property if it were let on the open market under a new tenancy on the same terms.