How Much Can a Landlord Increase Rent?

With the rising cost of living, a rent increase is one additional price change tenants hope to avoid. Unfortunately, in some cases, it may not be possible. Luckily though some tenancy laws in place aim to protect you from unscrupulous landlords that will look to line their pockets with as much cash as they can as fast as possible.

In the UK, the rules regarding rent increases depend on the type of tenancy you have. Landlords can, and often do increase rent and the amount or frequency can vary.

Commonly an annual increase is often seen but in terms of amount, for the most common tenancies, there is actually no limit on the increase a landlord can propose.

What are the types of tenancy?

In the UK we have 4 types of tenancy, each providing you with varying levels of protection against rent increases and eviction.

Assured shorthold tenancy (AST)

These are the most common tenancies and most new tenancies are automatically this type. You’ll have increased protection from eviction with this type of agreement. However, there are a few exclusions, although in many cases, these would be extremely unlikely to apply to a property you are choosing to rent.

Providing all the following apply the tenancy can be classed as AST.

• The property is rented privately
• It is your main accommodation
• Your landlord doesn’t live in the property
• Your tenancy started on or after 15 January 1989

If any of the below are true the tenancy cannot be an AST

• The tenancy began or was agreed before 15 January 1989
• The annual rent is more than £100,000
• The annual rent is less than £250 (£1,000 in London)
• The tenancy is for a business or a licensed premises
• The property is a holiday let
• The local council is your landlord

Excluded tenancy or licences

An excluded tenancy normally applies when you rent a room in a property where the landlord or their family live. This type of tenancy would mean the sharing of the common shared areas of the property such as the garden, the kitchen, and the bathroom.

Whilst there are

Unfortunately, with this type of property, you have less protection from eviction. However, the tenant can still take a landlord to court should certain mandatory rules not be followed. These include:

• Working gas and electricity in the premises
• The right to reasonable treatment without harassment or abuse
• A reasonable notice period to end the tenancy
• The provision of safety facilities including but not limited to boilers and appliances

Regulated tenancy

You probably have a regulated tenancy if you pay rent to a private landlord and your tenancy started before 15 January 1989. This tenancy is governed by the Rent Act 1977, and it provides you the tenant with strong legal protections and rights. For example, a tenant cannot be evicted unless a possession order is granted by the courts and where in some tenancies, housing benefit is not accepted, within a regulated tenancy it is. A regulated tenancy does also not need to be for an entire property. The let can be all or part of a house, flat, maisonette or bungalow.

Periodic tenancy

This is the legal name for a rolling tenancy, one with no fixed end date. When an AST ends unless you agree to another fixed term your tenancy becomes periodic. Unlike fixed-term tenancies, they can be terminated by the landlord or yourself by giving notice. There are two types of periodic tenancy, contractual and statutory. The differences between the two are quite small but likely important if you are unsure of the best rental options. A contractual periodic tenancy simply means the tenancy runs, for example, from month to month.

A statutory periodic tenancy though, means that where a tenancy agreement doesn’t contain a clause that specifies how the tenancy will continue after the end of the fixed term, the housing act 1988 can be applied. This allows the tenancy to run month to month for example based on the last rent paid. It must be drawn up as a separate agreement from the original tenancy.

Can a landlord increase my rent?

Now we understand which tenancy we have let’s look at whether the landlord can increase your rent and what they will have to do should it be possible. As mentioned earlier, a landlord can increase your rent, by how much and how frequently will depend on the type of tenancy.

Remember you can always check your tenancy agreement as it should include how and when the rent will be reviewed.

How often can a landlord increase rent?

If you are an assured shorthand tenant your landlord cannot increase your rent during a fixed term unless you either agree to it or your contract contains a rent review clause. The rent review clause usually sets out when an increase can happen, how much notice you’ll be given and a method for calculating the rent increases – for example, a formula as to how the new amount is reached.

For a rolling tenancy week-by-week or month-by-month basis, your landlord cannot normally increase the rent more than once a year.

If you are a regulated tenant your landlord can only increase the rent up to the registered rent (registered rent is also known as “fair rent”) which is set by a rent officer from the valuation office agency. It is usually reviewed every 2 years but can be requested sooner.

How does a landlord propose a rent increase?

Firstly, for all tenancies, your landlord must get your permission if they want to increase the rent by more than previously agreed. The rent increase must be fair and realistic, which means in line with average local rents.

During a fixed term

Your rent can only go up during a fixed term if you agree to a new rent, sign a new agreement and/or have a rent review clause in your contract. You do not have to agree to a rent increase during a fixed term tenancy but your landlord could serve you with a section 21 notice if there is a break clause.

In a periodic tenancy

Your rent can go up if you agree to it, your contract has a rent review clause or your landlord issues a section 13 notice to increase your rent. For a monthly, weekly or fortnightly tenancy one month’s notice of the intended increase is required. For a yearly tenancy, a period of six months’ notice is required before the increase can be put into effect.

In a regulated tenancy

Your landlord must serve a notice of increase of rent and can charge the new rent from the date it’s registered. The landlord fills in a ‘notice of increase’ form (available from legal stationers) and sends it to you. The Landlord can backdate the notice of rent increase for up to 4 weeks.

It is worth noting that once you sign a new agreement. The new rent is legally the new amount due, even I you verbally inform your landlord that you are unhappy with it.

What can I do if I disagree with the rent increase?

1. If you disagree with the rent increase the best thing you can do is speak with your landlord, if you have been a good tenant, it’s worth trying to negotiate and reach an agreement to pay a lower rent. It’s a good idea to look at similar properties in the area so you know how much your rent should be and use this to support your request.  
2. Your landlord will have needed to follow certain rules as described above if they wish to increase the rent.  Check your tenancy agreement and ensure those rules have been followed.
3. You can challenge a rent increase and appeal to the tribunal for rent complaints. You will need to apply before the date your rent increase is due to start (you can find this on your section 13 notice).

Gaffsy says,  “Under no circumstance should you stop paying your current rent as if you get into arrears your landlord can evict you.”

Do I have to move out immediately if I can’t afford a rent increase?

No, you do not have to move out immediately if you cannot afford a rent increase. Your landlord must follow a legal process if they want you to leave. They must give you the correct notice and apply to the court to end your tenancy. It is illegal for your landlord to evict you without a court order.

Solutions for landlords if there is a lack of tenants

Sometimes rent increases are more than justified but tenants may be in the minority agreeing to them. This could lead you to ending up with an empty property at the end of the tenancy or a property where the tenants challenge your rent increase plans.  

This can sometimes lead landlords to look at a quick win and this can come in a few ways. Sell a vacant property but wait for months for the right buyer to come along or consider selling with tenants in situ.

This option not only keeps tenants happy but allows you to cash in and perhaps look elsewhere to expand your property portfolio.

Considering contacting Gaffsy, a cash house buyer that offers several key advantages to landlords, means that a fast house sale could be your ideal solution.

That’s because with a company like Gaffsy you benefit from:

1. No fees: Unlike traditional estate agents, Gaffsy does not charge any fees, thereby saving you the landlord a significant amount of money during the selling process.
2. Genuine cash buyer: Gaffsy is a legitimate cash buyer, meaning we have the financial resources readily available to purchase properties. This eliminates the uncertainty and delays associated with traditional buyers who may rely on mortgage approvals or financing.
3. Transparent selling process: Gaffsy ensures a transparent selling process, providing landlords with clear communication and updates throughout the selling process. This transparency helps landlords make informed decisions and reduces stress during the sale.
4. Expertise in tenanted property: Selling a property with tenants in situ can present unique challenges. Gaffsy specialises in purchasing all types of tenanted properties, regardless of the tenancy type. They have the knowledge and experience to navigate the complexities of selling a property with existing tenants, making the process smoother for landlords.
5. Fast property sale: Gaffsy is known for its ability to facilitate quick property sales. Whether landlords are dealing with problem tenants or considering selling a property with squatters, Gaffsy has a track record of efficiently handling such situations. Landlords can rely on Gaffsy to deliver the fast property sale they need.

We buy any house regardless of its location, size, and condition. We can work with you to help you sell your flat fast, even if it isn’t your primary residence. Contact us today for your free no obligation cash offer.