How Much Can a Landlord Raise Rent in a Year?
8 September 2021
Whether you’re a landlord looking to increase your rental yield, or a tenant wondering about your rights, in this post we’ll explore what the law has to say about rent rises.
How Often Can a Landlord Raise Rent in a Year?
Landlords should include information about rent rises in their tenancy agreements. The tenancy agreement should specify how and when the landlord will review the rent. And bear in mind that “reviewing the rent” isn’t the same as “raising the rent.”
If a landlord finds that a property’s rent is in line with, or above, the average for the location, then they might decide to keep the rent the same, or even reduce it.
Raising Rent for Different Types of Tenancy
There are different rules for raising rent depending on whether it’s a periodic or a fixed-rate tenancy.
Raising rent in a periodic tenancy
A periodic tenancy is a short-term tenancy agreement operating on a rolling week-by-week or month-by-month basis. In these tenancies, landlords cannot raise the rent more than once a year – unless the tenant agrees to an increase.
Raising rent in a fixed-term tenancy
A fixed-term tenancy is a longer-term tenancy agreement that’s in place for a set period, such as a year. In these tenancies, landlords can only ever raise the rent if their tenants agree to an increase. If their tenants do not agree, they can only raise the rent at the end of the fixed term.
Raising rent in a regulated tenancy
A residential letting by a non-resident private landlord that began before 15 January 1989 is known as a regulated tenancy. There are different rules regarding rent increases for regulated tenancies.
Landlords can only raise the rent up to a registered amount that’s listed on the national register of rents. Even then, they can only raise the rent if they serve the tenant a notice in writing.
For more information about the special rules regarding regulated tenancies, check this dedicated government resource.
So How Much Can a Landlord Raise Rent in a Year?
UK law says that any rent increase must be “fair and realistic”. This only means that the increase must be in line with the average rent in the local area. So a landlord letting a property in an area where the average rent is £600 a month cannot suddenly raise the rent to £800 a month.
In Scotland, most tenancies are Private Residential Tenancies (PRTs). With this arrangement, local authorities can put caps on rental prices in designated areas, should they suspect they’re rising too quickly.
A tenancy agreement can define a procedure for increasing rent. Landlords might choose to increase rent in line with inflation, or by a set percentage each year. But landlords have a legal obligation to stick to any procedure they set out in their tenancy agreement. They need their tenants’ permission if they want to increase the rent by more than the agreed amount.
How Can Landlords Propose a Rent Increase?
There are a few ways landlords can propose a rent increase:
- Agree it with the tenant in writing, with a written record that both the landlord and the tenant should sign. Landlords do not need to give tenants any notice if they’re offering a new contract that includes a rent raise. However, the rent raise will not come into effect unless the tenant agrees to it.
- Renew the tenancy agreement at the end of a fixed term residency, with an increased rent.
- Use an “assured tenancy form”, also known as a Section 13 rent increase notice, to propose a rent increase at the end of the fixed term tenancy. You can download an assured tenancy form from gov.uk.
Where a tenant rents weekly or monthly, landlords must give at least one month’s notice of a proposed rent increase. But with yearly tenancy agreements, they must give at least six months’ notice.
Total Peace of Mind for Both Tenants and Landlords
Renting can be risky for both landlords and tenants. So at Hazelton Mountford, we aim to make life easier for everyone, whether you’re renting from a landlord or letting to a tenant in the Worcester area and across the UK.
Our comprehensive landlord insurance policies can cover your building and contents, with added protection for your rental income. So if an insured event ever happens to your property, or if your tenants ever struggle to make rent payments, we’ll cover you for your loss of rent income.
We can also cover tenants with our dedicated tenants insurance policies. We’ll cover your possessions against loss, damage or theft, with extra protection for any accidental damage you might cause to your rental property.