When and How To Increase Your Rent

The private rental sector is constantly evolving, with a wider range of individuals then ever before choosing it as a preferred tenure. The average age of first time buyers is rising and many are choosing to rent rather than buy, meaning that tenants are remaining in their properties for longer. 

A raft of changes to the Private Rented Sector has given tenants more rights, and potential changes or even the abolition of Section 21 notices will offer more security, and as a result of all of these factors the market is witnessing a steady increase in tenancy lengths – good news for landlords and tenants alike. 

However, it’s usually the case that, when a tenant moves on, the landlord takes the opportunity to assess the amount of rent being charged, and increase if the market has moved on. But if a tenant stays in their home for longer, a landlord may wish to increase the rent while the tenant is still living in the property.

Rules around increasing rent when a tenant is in situ
The most common method of increasing rent is when a new fixed term tenancy is agreed when the previous one comes to an end. 

With all Assured Shorthold Tenancies landlords can increase the rent after the initial fixed period if it is stated in the tenancy agreement or if the tenant agrees to the increase. There may be a rent increase clause stated within the tenancy agreement which would have been agreed and signed at the start of the tenancy, however the rent cannot be increased during the first fixed term. 

A landlord can increase the rent if they wish to after the initial fixed period, providing:

  • The tenancy agreement includes information about the procedure for a rent increase
  • The landlord gives the tenant the required notice of the intended rent increase
  • The landlord provides the tenant with written notice that a change will be made to the terms of the tenancy agreement

Landlords are unable to increase the rent before the end of the initial fixed period unless this is stated in the tenancy agreement, or both the tenant and landlord agree to the increase in rent.

Where a tenancy has become a period tenancy, and the tenancy agreement does not provide information on a rent increase, the landlord can only increase if the landlord and tenant agree, or by issuing a section 13 notice.

Should I increase the rent?
This really is the biggest question. In many cases, a good tenant can offer much more value to you as a landlord than the lure of a little more rental income. In some instances a suggestion of a rental increase may force the tenant to vacate, the costs of which will often turn out to cost you more than the increased rental amount. 

However, by being clear, and ensuring that your tenancy agreement provides for rental increases, you are more likely to ensure the agreement and goodwill of your tenants. 

Choosing to work with a reputable lettings and managing agent, who can liaise on your behalf with your tenants can make rent increase negotiations much easier.

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