Rent may be a touchy issue. Tenants are often dissatisfied with rent increases, but landlords must consider the expenses of mortgage repayments, market fluctuations, and inflation when determining a reasonable rate or raising a current rent. The truth is that nothing remains the same forever, even costs.

Inflation is now relatively low, yet the cost of living is rising. In June of this year, the Consumer Price Index increased from 1.9 per cent to 2.0 per cent. Rent rises are an economic reality as landlord expenses rise with time. There is, however, a narrow line between raising prices to offset growing expenses and raising rates for profit.

In this post, we’ll go through the regulations for rent increases and how much can a landlord increase rent.

Rent Increase Statistics

Rent Increase Statistics

According to Statista statistics from February 2019, the average rent in the UK is £940 per month. Compared to the previous year, this grew in 11 of the 12 regions. The average rent in London is £1,599, making it the most expensive location in Europe to rent a property. While London is the most-costly for renters, the North East is the least expensive. The average monthly rent is £524.

When Landlords Have the Right to Increase Rent?

When Landlords have the Rights to Increase Rent

The lease agreement determines the current rent for an assured shorthold tenancy, whether periodic or fixed. When the renter signs the lease agreement, they commit to paying this amount. The lease agreement should also specify when and how a landlord may conduct a rent review.

1. Rent rises for fixed-term tenancies

In a fixed-term tenancy, such as a 12-month lease, the landlord cannot raise the rent until the fixed-term finishes unless the tenancy agreement provides a temporary rent increase. Whatever the tenancy agreement says concerning rent increases, you must follow it.

If you raise the rent after a fixed-term lease, the new rate must include in a new fixed-term rental agreement, which the renter must sign to indicate their consent to pay the increased rent.

Alternatively, the landlord may convert a fixed-term lease to a periodic tenancy. You may now issue a rent increase agreement.

2. Rent rises for short-term leases

The landlord may only raise the rent once a year under a periodic tenancy that renews monthly (or weekly). Any rent increases must be agreed upon with the renter. Once you have a written agreement, you must sign and date it. Following that, the landlord must issue a new rent form, providing at least one month’s notice of the rent increase to the tenant.

If you want to raise the rent, insert a language in the lease agreement stating that the rent will rise by X in six months. As a result, the renter is aware of the impending increase and has the opportunity to consent to it ahead of time. However, if you raise the rent by an unreasonable amount, the renter has the right to contest the increase, even though they initially consented to it.

3. Rent increases on regulated tenancies

Different requirements apply to regulated tenancies. Rent increases in this form of residence are limited to amounts specified by the Valuation Office Agency (VOA). Landlords may request that the VOA evaluate rents every two years. A rent review might seek if anything has changed, such as the property being renovated or enlarged.

Can a Tenant Challenge a Rent Increase?

Can a Tenant Challenge a Rent Increase

Tenants do have the right to contest a rent increase. If a tenant is dissatisfied with a planned rent increase, you may serve a Section 13(2) Notice of the Housing Act 1988 Rent Increase Notice on them. It is only possible after the conclusion of a fixed-term lease (minimum of 12 months). You also cannot utilize a Section 13 Rent Increase Notice if the terms of the lease agreement already include provisions for a rent increase.

The Section 13 Rent Increase Notice must include the following information

  • Name and address of the landlord/business
  • Details about the tenant
  • Address of the property
  • Rent rise proposed

When will the rise in rental payments begin?

Ensure that any contact with the renter about rent hikes is in writing. It is critical because you will need the documentation trail if your renter contests the rent increase.

If a tenant is dissatisfied with a planned rent increase, they may file a complaint with a tribunal. They may, however, only do so if the tenancy arrangement is guaranteed or assured shorthold and they have received a Section 13 Rent Increase Notice.

The tribunal will rule whether the rent increase is reasonable compared to comparable houses.

If the tenancy is regulated or protected, the tenant may request that the Valuation Office Agency (VOA) investigate whether the proposed rent increase is reasonable.

Resolving Issues When a Tenant Objects to a Rent Increase

Working with a tenant to settle a rent issue before it escalates is an intelligent approach. You and the renter will save time and money due to this.

  • If you want to raise the rent, consult with the renter and explain why this is necessary.
  • Have excellent arguments, and be prepared to support your choice.
  • Tenants may be on a limited budget, and even a slight rent rise may be challenging.
  • Be open about raising the rent to cover increased operating expenses.
  • You must pay attention to the renter.

So, the final call is, according to government instructions, rent increases for current renters must be fair and practical, keeping with typical area rentals. Still, there is no restriction on how much they may charge. Proposed alterations may contest in court.

Conclusion

Rents in the United Kingdom are skyrocketing. In reality, the average monthly price of a newly leased house outside London increased by 8% year on year. While there are many complicated reasons behind this, one of them is simple supply and demand: the number of renters seeking houses in some locations of the UK exceeds the number of available dwellings. To find your answers regarding rent increases in the UK, go to the preceding instructions.

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