The introduction of the Renters’ Rights Bill will fundamentally alter the way landlords are able to increase rent. Informal methods – such as sending an email or text to the tenant – will no longer be valid. Instead, rent rises will be tightly regulated, requiring a formal process that places greater responsibility on landlords to plan ahead.
Under the new rules, landlords will only be permitted to increase rents once every 12 months by serving a Section 13 notice. Two months’ notice must be given before any increase, and the new rent must align with current market rates. This marks the end of rent review clauses in tenancy agreements and effectively invalidates informal arrangements.
Allison Thompson, National Lettings Managing Director at LRG, highlights the shift in approach required by landlords “Landlords will need to plan rent increases carefully, especially in rising markets where waiting 12 months to adjust rent may affect profitability.
“It will also become more important to gather clear evidence of comparable market rents as tenants will be given greater ability to challenge rent increases they believe are unfair.”
This added scrutiny means landlords must not only consider timing but also ensure that increases are defensible if the tenant challenges the proposed rent and requests a binding determination from a tribunal.
Importantly, rents cannot be backdated, nor can they be increased beyond the figure originally proposed. Where tenants face financial hardship, tribunals may even defer increases by up to two months.
For landlords, this can create delays in achieving market-aligned rental income. Thompson states “For landlords, this means longer lead times and potentially delayed income increases, even where the rent remains below local market averages.”
To adapt, landlords are encouraged to prepare now. Steps include:
- Removing any rent review clauses from tenancy agreements.
- Maintaining clear records of the last rent increase.
- Monitoring local market trends.
- Engaging tenants in discussions before issuing a notice.
Planning increases well in advance will be crucial to maintaining profitability within the framework of the new legislation.