- Understand the legal requirements for rent increases in England
- Distinguish between contractual and statutory periodic tenancies
- Use the correct method for rent increases based on tenancy type
- Provide proper notice and follow legal procedures
- Consider market conditions and tenant retention
- Be aware of tenants’ rights to challenge rent increases
As an English residential landlord, you might find yourself in a position where increasing rent during an ongoing tenancy agreement becomes necessary. This comprehensive guide will walk you through the process, legal considerations, and best practices for managing rent increases while maintaining positive relationships with your tenants.
1. Understanding the Legal Framework
Before you consider raising rent, it’s crucial to understand the legal landscape surrounding tenancy agreements in England.
Know Your Rights and Responsibilities
As a landlord, you have the right to increase rent, but this right comes with specific regulations and limitations. The type of tenancy agreement in place will dictate how and when you can implement rent increases.
Assured Shorthold Tenancies (ASTs)
For ASTs, which are the most common type of tenancy in England, you can typically increase rent:
- Once per year for periodic tenancies
- At the end of a fixed-term agreement
Contractual vs. Statutory Periodic Tenancies
It’s important to distinguish between these two types:
- Contractual periodic tenancies continue based on the terms in the original agreement
- Statutory periodic tenancies arise automatically when a fixed-term ends
This distinction affects how you can increase rent.
| Tenancy Type | Rent Increase Method | Frequency |
|---|---|---|
| Fixed-term AST | As per agreement | At end of term |
| Contractual Periodic | As per agreement or Section 13 | Once per year |
| Statutory Periodic | Section 13 notice | Once per year |
Learn more about tenancy types and your rights
2. Methods of Increasing Rent
Rent Increases During Fixed-Term
Increasing rent during a fixed term is unusual but possible if your agreement includes a rent review clause.
Rent Increases by Agreement
You can negotiate a rent increase with your tenant at any time. If agreed, it’s best to formalize this through a new fixed-term tenancy agreement.
Contractual Rent Review Clause
If your tenancy continues as a contractual periodic tenancy and contains a rent review clause, follow the steps outlined in that clause.
Section 13 Notice (Form 4)
For periodic assured tenancies without a rent review clause, or for all statutory periodic tenancies, use a Section 13 notice (Form 4 in England).
Download Form 4 (Section 13 notice) for England
3. Providing Proper Notice
When using a Section 13 notice, you must provide sufficient notice before the rent increase takes effect:
- One month for monthly (or more frequent) tenancies
- Six months if the rent is paid on an annual frequency
- A period equal to the rental period for other frequencies
You cannot increase rent within 52 weeks of the last increase or the start of the tenancy, with an exception for fixed-term tenancies that become statutory periodic.
4. Calculating the Appropriate Increase
Determining the right amount for a rent increase requires careful consideration of multiple factors.
Market Rent Considerations
The UK government states that rent increases should be “fair and realistic” and in line with local averages. Research similar properties in your area to ensure your proposed rent is competitive.
Tribunal Assessments
Be aware that if challenged, a Tribunal will base their decision on the market rent for the property, which they may adjust up or down.
| Factor | Consideration |
|---|---|
| Local Market | Average rent for similar properties |
| Property Improvements | Value added to the property |
| Tenant Affordability | Current tenant’s ability to pay |
Check the latest UK rental market trends
5. Communicating with Your Tenants
Clear and respectful communication is key when implementing a rent increase.
Explain Your Reasoning
While not legally required, explaining the reasons for the increase can help maintain a positive relationship with your tenants.
Be Open to Discussion
Allow room for dialogue. Your tenants may have concerns or questions about the increase.
Tenant’s Right to Challenge
Inform your tenants that they have the right to challenge the proposed rent by applying to a Tribunal using Form 6.
Access Form 6 for tenant applications
6. Alternatives to Rent Increases
Sometimes, alternatives to direct rent increases can be beneficial for both landlords and tenants.
Energy Efficiency Improvements
Investing in energy-efficient upgrades can reduce utility costs for tenants, potentially offsetting the need for a rent increase.
Value-Added Services
Consider offering additional services, such as gardening or internet, which could justify a higher rent.
Longer-Term Agreements
Offering longer fixed-term agreements in exchange for a modest rent increase can provide security for both parties.
Key Takeaways
- Always follow legal procedures when increasing rent in England
- Distinguish between contractual and statutory periodic tenancies
- Use the correct method (agreement, rent review clause, or Section 13 notice) based on tenancy type
- Provide proper notice periods for rent increases
- Consider market conditions and tenant circumstances
- Be aware of tenants’ rights to challenge rent increases through a Tribunal
By following these guidelines, you can navigate the process of increasing rent during a tenancy agreement while maintaining positive relationships with your tenants and ensuring the profitability of your property investment.
Frequently Asked Questions
- How often can I increase rent for an assured shorthold tenancy in England?
You can typically increase rent once per year for periodic tenancies, or at the end of a fixed term. - Do I need to use a specific form to notify tenants of a rent increase?
For periodic tenancies without a rent review clause, or for statutory periodic tenancies, use Form 4 (Section 13 notice) in England. - What if my tenant refuses to pay the increased rent?
If you’ve followed the correct procedures, the tenant is obligated to pay the new rent. However, they have the right to challenge the increase through a Tribunal. - Can I increase rent by any amount I choose?
While there’s no legal cap on rent increases, they should be fair and in line with market rates. Excessive increases can be challenged by tenants and may be adjusted by a Tribunal. - Is it better to increase rent annually by small amounts or less frequently with larger increases?
Generally, small, regular increases are often more palatable to tenants and can help you keep pace with inflation and rising costs.
