When and how to increase rents

The Private Rented Sector is rapidly becoming the go-to tenure for people of all generations. The sector used to be synonymous with low quality, and student housing, but for those who value ease and flexibility, renting a home has become the first choice for a growing number of ‘lifestyle renters’.

This inevitably means that tenants tend to want to stay in their properties longer, and as a result the market is witnessing a steady increase in tenancy lengths – which is good news for tenants and landlords alike.

However, it’s usually when a tenant moves out that the landlord has an opportunity to assess the amount of rent being charged, taking account of rents in similar properties nearby and making an adjustment on the next tenancy. But if a tenant stays in their home for longer, then as a landlord you may wish to increase the rent whilst the tenant is still living in the property.

So, just what are the rules around increasing rents?

Most Assured Shorthold Tenancies include a clause which allows the landlord to increase the rent at any time outside of the fixed term. 

It is unlikely that a landlord would be able to increase the rent during a fixed term tenancy, however once the fixed period has ended, then a landlord usually has the right to increase rent.

Some Tenancy Agreements detail the rental price increases, and when this would take place and in which case there is no need to give advance notice – however it is good practice to issue a reminder.

If nothing is detailed in the tenancy agreement, and the rent is paid monthly, then the landlord must give the tenant one month’s notice of their intention to increase the rent. This rule is the same if the rent is paid weekly or fortnightly. Where the rent is paid annually, then the landlord has to give six months’ notice of their intention to increase rents.

In June 2019 inflation was 1.9%, meanwhile rents in the same month grew by 1.8%, according to HomeLet

When you issue your tenant notice of your intention to increase rents, and they accept this – then this is fine.  Just be sure to adjust any direct debits or standing orders.

However, if the tenant disagrees with the proposed rental price increase, then you need to issue the tenant with a Section 13 Notice, informing him/her that you wish to increase rents. Where the tenant continues to disagree with the proposed increase, then he or she can refer the proposed rent increase to the Rent Assessment Committee. 

In all cases we would recommend fair increases in rent are requested. Whilst rents are growing in line with inflation then it would be unwise to ask for an unreasonable rental price increase.