In England, rent increases can vary significantly, with several factors influencing how much a landlord may decide to raise the rent. If a tenancy agreement includes a rent review clause, typically, the rent is reviewed on a yearly basis. For periodic tenancies, it's common practice not to increase the rent more than once per year, although it's technically possible if tenants agree. In fixed tenancies, rent hikes are generally not considered until the end of the term unless agreed upon by both parties.
The extent to which rent can be increased can depend on several factors, including market rates, inflation, and individual circumstances of both landlord and tenant. In general, aligning rent increases with wage inflation can be a reasonable approach, as it ensures the hike is manageable for tenants and reduces the risk of missed payments. As of mid-2023, a rent increase of around 7% could be seen as reasonable, given that it sits below the wage inflation rate of 7.8%.
It's worth noting that the rental market can be highly variable across the UK. For instance, Rightmove predicted rents would increase by about 5% outside of London and 3% in London in 2024. In contrast, Zoopla was more optimistic, projecting rent increases between 5% and 8% across the UK. That said, in London, the high proportion of income spent on rent (40.4% of earnings) could limit the possibility for rent increases.
If a landlord wishes to increase rent, and it's not covered by a rent review clause, they may issue a Section 13 notice, which can only be used once every 12 months. This will change with the introduction of the Renters Reform Bill, mandating that rent can only be increased annually using a Section 13 notice.
For landlords, it's crucial to be mindful of regional differences; advice applicable in England may not be suitable for Scotland, where different laws apply. Tenants who find themselves in a difficult situation, such as an unaffordable rent increase without a current tenancy agreement, should seek advice on their rights and potential options. They might benefit from discussing the situation with their landlord, especially if there's a longstanding relationship and history of mutual cooperation.
For more information and guidance on how to navigate rent increases, whether you're a landlord or tenant, check out the resources provided by OpenRent and The Independent Landlord. These can offer insights into proposing rent increases, what to consider as a fair increase, and how to handle situations without a formal agreement in place (The Independent Landlord) (OpenRent Landlord Hub).
Comments