Rents increase but when can a landlord up the rent

Published: 19/02/2015

The average UK rent is now £836 a month, according to the latest figures from Countrywide for the first month of the new year.

One and two bedroom properties experienced the largest year-on-year increase; the average monthly rent for a one bedroom property is £751 (8.5%) and a two bedroom property is £810 (3.6%). Three bedroom properties also saw a smaller increase of 1.6% (£930). However four bedroom properties saw an annual decrease; average monthly rent dropped by 3% to £1345.

When can a landlord increase the rent?

A landlord cannot just increase the rent whenever they choose. In fact, according to landlord law, there are only two points during a tenancy when a landlord can legally increase a tenant’s rent. The first is when a tenancy is being renewed. In this instance a new tenancy agreement with details of the new rent is required.

The second is during a periodic tenancy. However it is important to note firstly that a rent increase can take effect no earlier than 52 weeks after the commencement of the tenancy or a previous rent increase and secondly that the landlord must follow the procedure set out in section 13 of the Housing Act 1988. This procedure involves serving a notice on the tenant proposing the new rent and the date upon which it will take effect.

There must be a minimum period of time between the date the notice was served and the date the new rent comes into effect. This minimum period is dependent on the nature of the periodic tenancy.

Is it worth the risk?

Let’s be realistic – a rent increase is never going to go down particularly well with existing tenants so a landlord needs to consider the repercussions of increasing the rent during a tenancy. At a time when budgets are already stretched a rent increase could be the proverbial straw that breaks your tenant’s finances, sending them into rent arrears. Alternatively a rent increase could prompt the tenants to move out, leaving you with a potential void period whilst you secure new, unfamiliar tenants.

As always good communication is important. Speak to your tenants about your plans, perhaps even explaining the decision behind the rent increase. While no tenant is going to welcome paying more, at least by informing them of your intentions you’ll understand their situation better and be able to make a more informed decision.

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Content correct at time of publication