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Rent increases

As part of the Renters' Rights Act, the government is changing the rules about how landlords raise rents. It will also alter the process of appeal for tenants and the role of tribunals in settling disputes. This is designed to create a fairer and more predictable environment for tenants, whilst ensuring landlords retain the right to raise rents in line with a fair market rate.

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What you need to know

  • Rent can only be increased once per year in line with market value.
  • Landlords must give two months’ written notice.
  • Tenants can challenge increases through a tribunal.
  • Transparency and documentation are key to compliance.

What’s changing?

Under the new legislation, rent increases will be limited to once per year for all tenancies. This applies regardless of whether the tenancy is new or ongoing. The aim is to prevent sudden or excessive rent hikes that could destabilise a tenant’s living situations.

Under the new rules

  • Rent can be increased once a year.
  • Landlords can only increase rents in line with market rates.
  • Tenancy agreements can no longer contain rent review clauses.

Notice periods and procedure

Landlords must now provide at least two months’ written notice before any rent increase takes effect. This gives tenants time to plan, budget, or challenge the increase if they believe it is unfair.

Formal notice procedure

  • Clearly stating the new rent amount.
  • Specifying the date the new rent will begin.
  • Ensuring the notice is served in writing and in accordance with legal requirements.

Tenants’ right to challenge

If a tenant believes a proposed rent increase is excessive or not in line with local market rates, they have the right to refer the matter to the First-tier Tribunal. The tribunal will assess whether the proposed rent is fair and reasonable based on comparable properties in the area.

The new tribunal reforms mean

  • A tribunal can no longer increase rent beyond what the landlord initially proposed.
  • Rent increases cannot be backdated and will apply from the date of Tribunal determination.
  • The tribunal has the power to defer rent increases by up to a further 2 months.

What this means for landlords

Landlords and letting agents should take a transparent and proactive approach to rent reviews and increases, and keep a record of all rent notices and any correspondence related to rent changes, in case of future challenges.

To prepare for the changes

  • Review rents annually and document the rationale for any increase.
  • Benchmark against local market rates to ensure competitiveness and fairness.
  • Communicate clearly with tenants to maintain trust and reduce the likelihood of disputes.