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Setting and Increasing a Rent

By: Sarah Clark (ILEX) - Updated: 23 Mar 2021 | comments

With the rising costs of living, it can sometimes be inevitable that you have to consider putting up the rent on your property, much to your tenants’ chagrin. There are official ways of doing this, if and when necessary.

At the Start of the Tenancy

When you set out the terms of your rental agreement at the start of the tenancy, you should also make sure that rent amounts, timings and arrangements are covered – plus any timescales for rent reviews. This prevents any problems with the tenant arguing that they were not notified there would be a prospect of a rent increase at any time.

The amount of the rent should take into account the prevailing market conditions, the type of property, and the amount you need to cover any mortgage payments. Ideally you should aim for at least 125 per cent of the monthly mortgage payment.

If the tenant has signed a fixed term tenancy agreement, it should state that the rent will be a fixed amount for the entire length of the tenancy – or if the tenancy is long term that you will be reviewing it regularly.

If the tenancy agreement doesn’t cover increases in the amount of rent, you can only put the rent up with the agreement of the tenant, if the tenancy is for a fixed period of time. If the tenancy is a contractual periodic tenancy, you will need to write to the tenant and notify them when the rent is to be increased. Alternatively, there is a formal procedure which is part of the Housing Act 1988 which allows a landlord to propose a rent increase, as long as it’s at least a year after the tenancy started. This legislation also allows a landlord to put the rent up at yearly periods following the first rent increase.

How Much Notice Should I Give?

You must give the tenant at least a month's notice of any proposed increase in the amount of rent, if they pay you weekly or monthly. If the tenant agrees to the increase and doesn’t oppose it, they just need to pay the extra from the date you give them in the written notice. If they dispute the increase, they have to apply to a rent committee to decide whether the increase you are suggesting is fair. They have to make this application to there rent committee before the increased rent would have become due.

Protected and Statutory Tenants

If your tenant is a protected tenant according to the Rent Act 1977, they are entitled to make an application to the Rent Officer for what’s deemed to be a 'fair rent'. If they do this, you will only legally be able to ask them for what’s assessed to be a 'fair rent' according to the Rent Officer.

If your tenant has made this type of application and the rent has been assessed, you’ll then only be able to review the amount that you charge in rent every two years, unless you can show that there have been substantial improvements to the property, or the circumstances of the actual letting have changed. Any proposed changes to the rent will also have to be agreed by the Rent Officer.

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A tenanted house was bought via a company. The agency and previous landlord turned out to have neglected both the tenants and the property so badly. The agency's inspection to the property showed that the property is in a good condition, but the evidence showed by the workers sent by the new landlords to examine the property, evidently suggest otherwise. The new landlord as a result incurred a huge bill of fixations to bring the house to a reasonable safe state and still doing so to ensure the property is legally suitable and inhabitable, especially that the tenants seemed to be in a vulnerable state. The new landlords wanted to take charge and release the agency from managing the property, but the agency is requesting a heavy penalty to do so. By talking to the tenants who were happy with the new fixations, showed that they spent years complaining but their complaints were not processed. The new landlords asked for the information about these complaints but the agency is not releasing any information. How can the new landlords deal with what is happening? Can the new landlords force the agency to release the information they posses about the property? Can they claim compensation for agency's incompliance?!

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