Rental Increase Notices

Raising the Rent

You might be wondering whether it is the right time to raise your tenant’s rent. 

The rent may have been at the same level for a while and no longer in line with the market value for your property area. 

You may need additional income to fund improvements to your property, or to help alleviate mortgage rises and the cost-of-living crisis.

We can offer advice on the more complex aspects of renting out your property, including rental increases and market rates. We can also manage the process for you.

We can seek to raise the rent by carrying out the following steps: -

Rent Review Clause

We can review your rental agreement and excercise any clauses which allow you to increase the rent.

Many landlords have a tenancy agreement with their tenants which includes a specific clause that allows them to increase the rent during the fixed term of the tenancy. 

For example, a tenancy agreement can specify an agreed increase after 12 months in a 24-month agreement.

A Section 13 (rental increase) notice cannot be used when a rent review clause is already contained in a contractual periodic tenancy.

Increase The Rent By Mutual Agreement

If not already covered by the tenancy agreement, we can speak to your tenant and try to agree the rental increase. 

They may accept the increase if they understand that similar rates apply elsewhere and that moving out would not yield significant savings.

Once agreed, we will obtain written evidence of the new rent and the date that the rental increase commences, so there will not be any need to serve a Section 13 (rental increase) notice.

Increasing Rent through a Section 13 Notice

If your tenant does not agree to the rent increase in writing and there is no clause in the agreement, we will have to wait until the fixed-term tenancy ends.

During this period, the tenant will continue to pay the same rent but there are two options: 

1. serve the tenant with a Section 13 rent increase notice; or 

2. ask the tenant to leave by serving them with a Section 21 notice

When Can a Section 13 Notice Be Served?

Strict rules govern the notification periods for serving a Section 13 notice. The required notice period depends on the frequency of rental payments:

• Weekly, bi-weekly, or monthly paying tenants should receive 1 month's notice.

• Tenants paying rent less frequently than monthly should be given notice based on their payment frequency. For instance, if the rent is paid every three months, tenants should be given three months' notice of a rent increase.

• You can serve a Section 13 rent increase notice only once within a 12-month period.

How Much Can a Landlord Increase the Rent By?

If your assured shorthold tenancy agreement specifies when and by how much the rent increase can be, you can only increase it to that level. If you wish for more, your tenant will need to agree to the increase.

You should consider whether the specified level of increase is appropriate for current market conditions. We will discuss your property with you to see what can realistically be achieved. 

How Often Can the Rent Be Increased?

The frequency of rental increases depends on market conditions but a Section 13 written notice can be served only once within a 52-week period. 

Whilst yearly increases may be seen as unreasonable, it is advisable to make small, yearly increases rather than waiting too long and burdening the tenant with an eye-watering hike.

Notice Period for Rental Increases

For tenants paying rent monthly or weekly, at least one month's notice of the proposed rent increase must be provided. 

However, it is good practice to provide two months' notice to allow tenants more time to find an alternative home if they consider the increase to be too high. For tenants paying annually, six months' notice must be provided.

Factors to Consider When Deciding on a Rent Increase

Tenants have rights, and they may challenge a rent increase they believe to be excessive. If we serve them with a Section 13 notice, they can contest it at a tribunal.

What Happens If the Tenant Refuses to Pay?

If a mutually acceptable rate cannot be agreed, we can serve your tenant with a Section 13 notice. If the tenant disputes this, a tribunal will make the final decision. If the decision favours the tenant, you will not be able to charge the higher rent. 

If you still believe your property is undervalued after that, you may consider seeking to recover possession of the property, provided the fixed term of the tenancy has ended. 

Please note that the government intends to end Section 21 no-fault evictions in the near future.

Where Can I Find More Information?

You can find additional information about rent increases and other useful resources for landlords on the gov.uk website. The Shelter website also provides clear guidance on the process.

We provide a rent guarantee scheme that is ideal for landlords who want to avoid concerns about rent increases. Under this scheme, you lease your property to us for a period of 3 to 5 years and we guarantee a rental income for your property, regardless of occupancy. You receive monthly payments without any breaks or stops, ensuring excellent rental yields.