What are your rights if your landlord wants to raise your rent during the cost of living crisis?
Women in Business
A lack of affordable housing and growing demand for rental properties have sent the rental market into a state of crisis, and young people are particularly affected. New data suggests that nearly four in ten renters under the age of 30 pay more than 30% of their income on rent, and some are turning to house sharing.
According to Rightmove, asking rents on property listings outside London are up 12% on the previous year, and growing at the fastest rate in 16 years. And the Office for National Statistics reports that for the year to August 2022, rents increased by 3.2% across the UK.
If you rent, you may be worried about what you can do if your landlord wants to increase the rent. There are some circumstances where a landlord can increase rents, but only by following the rules and sticking to the tenancy agreement. Tenancy law is complex, and your rights depend on the type of contract you have and where you are.
If you privately rent in England and Wales, you are likely to have what is called an assured shorthold tenancy. You would normally have a fixed-term period – usually six or 12 months, sometimes nine months for students – before the tenancy would go onto a periodic (month-to-month) open-ended tenancy.
If you have a fixed-term tenancy, the landlord could ask you to sign a new tenancy agreement at a higher rent, replacing your existing agreement. But you do not have to agree to sign this, and you can continue with the same price as your current agreement.
Alternatively, your tenancy agreement may have a rent review clause. This depends on the agreement and what is stipulated. But your landlord would have to stick to the procedure set out in the agreement. Your landlord may also ask you verbally or in writing to agree to a new rent. The government states that your landlord must get your permission to increase the rent. The rent does not increase if you do not agree.
Shelter, a housing charity, warns that if you pay the higher rent, even if you don’t agree to it, this automatically becomes the new legal rent. It is best to seek advice before paying a new rent.
If at the end of your fixed term, you do not sign a new tenancy agreement or end the tenancy yourself, your existing tenancy will continue as a periodic tenancy (rolling month to month) at the same rent. During a periodic tenancy, there are several ways for your rent to be increased. This includes, as above, the rent review clause or the landlord asking you to increase the rent and you accepting – either by paying or signing a new agreement.
The final way your landlord can increase the rent is by serving you a Section 13 notice. Your landlord can only do this once a year, they must give you at least one month’s notice, and use the correct form.
If you do not agree to the rent increase proposed under the Section 13 procedure, you can challenge the increase at a first-tier tribunal. The increase usually doesn’t apply until the tribunal has decided on whether to increase your rent, keep the rent the same, or possibly decrease it.
Tenancy law and rent raises are complex
The Scottish system
In Scotland, the government reformed private renting and introduced the Private Residential Tenancy agreement in December 2017. This banned “no fault” evictions, introduced open-ended tenancies, and protected tenants from frequent rent increases.
Rent increases in Scotland under this system are different than in England and Wales. There are different protections on rent increases. These include that your rent can not be increased more than once every 12 months, your landlord must use the correct form, and provide you with at least three months’ notice.
If you think the rent increase is too much, you can apply within 21 days to a rent officer for them to decide on whether this increase is fair. Based on local market rents, the rent officer could decide to increase the rent even higher or lower the rent if they think it is too high.
Negotiating with your landlord
You can negotiate rent increases with your landlord. Getting a new tenant can be costly and risky, with the upfront costs of tenancy checks and letting agent fees. If you can not afford the increase, Shelter recommends having a conversation with your landlord and explaining your financial situation. To prepare for this conversation, look at what similar properties in your area are charging – you may be able to argue that your landlord is charging above the market rent. They may be understanding and agree to not increase your rent or increase it by an affordable amount.
While there are options to challenge and negotiate a rent increase, if you are on a periodic tenancy in England and Wales, your landlord can serve a Section 21 “no fault” notice. This gives you two months’ notice to leave the property without reason for eviction.
If you stay beyond the two months, the landlord can take you to court – and if they have done everything by the book, the court has to grant possession to the landlord. The UK government has announced plans to end Section 21 evictions, but so far, there is no date for these changes.
(This article is not intended to be in-depth legal advice. If you have questions about your situation, talk to a housing advice charity such as Shelter or Citizens Advice.)