While there’s no legal cap on how much a private landlord can increase rent, there are still a few things to consider before going ahead with the uptick.
Echoing the ONS’ recent findings of a 5.3% average spike in private rental prices, our data shows a yearly average rental boost of 17% across the UK.
This is likely also causing quite a few landlords who haven’t yet increased their property’s rent to start seriously thinking about it. Plus, with no fixed legal cap on rent increases, it’s tempting to consider making bolder moves.
For a decision that truly benefits you and keeps your relationship with tenants strong, let’s dig into some of the most important aspects when it comes to bumping up your property’s rent in England.
- How often can a landlord increase rent?
- Increasing rent for periodic and fixed tenancies
- What is a fair rent increase for existing tenants in 2024?
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How often can a landlord increase rent?
When you’re considering proposing a rent increase, one of the first things to think about is how often you can suggest one and how much notice your tenants should get.
It’s not just a wise move but also essential to provide your tenants with a heads-up of at least a month if they follow a weekly or monthly rent payment schedule.
Now, when it comes to how often you can increase the rent, the general idea is to aim for once a year. But of course, this depends on what kind of tenancy you have going, whether there’s a rent review clause, and if your tenants agree.
If your tenancy agreement has a rent review clause, whether for a fixed term or a rolling contract, all you have to do is… go along with that clause. Usually, this kind of clause involves reviewing the rent on a yearly basis.
Increasing rent for periodic and fixed tenancies
When it comes to periodic tenancies, it’s usually not the norm to up the rent more than once a year. Yet, technically, you are allowed to increase the rent more than once a year, if your tenants agree.
In certain scenarios, you might even see two increases within a year, though this is more often than not used as a method to gradually catch up with the rent market.
With fixed tenancies, suggesting a rent hike isn’t really on the table unless your tenants agree with tweaking the tenancy agreement. This means you’ll need to wait until the end of the fixed term.
However, if your fixed term renewals span six months each, you could nudge the rent twice in a year. The first bump would be in the initial six-month renewal, and the second bump in the next six-month renewal.
If you’re considering this two-step approach, it’s best to have an open conversation with your tenants and explain that it’s a way to gradually roll in the increase.
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If all else fails, you can turn to a Section 13 notice as a final option for raising the rent. Keep in mind, though, that you can only use a Section 13 notice once every 12 months.
Just a heads up – once the Renters Reform Bill takes effect, you’ll only be able to bump up the rent once a year, and you’ll also be required to use a Section 13 notice.
What is a fair rent increase for existing tenants in 2024?
While there isn’t a one-size-fits-all answer to this question, a common approach among private landlords is to align rent increases with wage inflation.
By following this approach, a rent increase is also more likely to be manageable for your tenants, reducing the risk of them falling behind on payments.
For example, the ONS revealed in August that regular pay (excl. bonuses) saw a growth of 7.8%. This suggests that a rent uptick of around 7% could be considered reasonable in mid-2023, as it falls below the average wage inflation.
And hey, if you’re still feeling a bit uncertain about bringing up a rent increase, make sure to check out our Smart Rent Collection service.
Not only does it collect rent on your behalf but also gives you the flexibility to effortlessly adjust the rental amount whenever you need to.
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You REALLY need to check facts about this. Most of what you said does NOT apply in Scotland. Your landlord clients in Scotland could be inadvertently breaking the law if they follow your advice here.
This applies to England only.
Yes Mark, and the article needs to make that clear.
Hello,
Hope someone can advise accordingly.
We have rented our property for 19 years, we maintain all issues and pay for all emergency repairs.
We’ve done lots of renovations and made it our life time family home.
We have a good relationship with our landlord and both parties never mither.
Over the 19 years our landlord has always wanted cash for his rent each month and our arrangement suited both parties.
He’s always kept the rent to a minimum on the understanding we MAINTAIN the house.
He’s now asking for a £500 increase per month but here is the issue, we don’t have a tenancy agreement in place… we only had one for the first year and everything just continued verbally.
The £500 increase we cannot afford on top of paying for emergency and maintenance insurance plans ??
What shall I suggest??
Kind Regards
A tenancy agreement becomes periodic at the end of the original fixed term so you will have a tenancy agreement in place, it just rolls on.
I also offer tenants lower tham market rents where they look after more maintenance than a typical tenant, but there is a limit to how much under market rates is viable from a landlords perspective, and landlords remain legally responsible for maintenance and with renters reform bill increasing responsibilities this sort of arrangement can cause issues.
I think if you are looking after maintenance and have been there 19 years a discount of around 20% below market rates is reasonable so you could offer that. It’s upto landlord though and after 19 years he may just be looking to sell unless he can get a high income.