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How to manage a rent increase

8 January 2016 Cat Byers Read time: 3 min
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Cat Byers

It’s a new year and a new start, which for many people in the UK means time to take a look at their accounts and get on top of any financial situations for the coming year - as well as tightening their budgets following the expense of Christmas. Unfortunately for tenants, this also applies to landlords, who may well be looking at the sums and considering rising the rental costs of their properties.

Annual rent increases are becoming much more common across the UK, with an average increase of 2% year on year, a statistic which rises to a staggering 8.5% for one bedroom properties. In London, the average annual increase is now a shocking 10.6%, a huge sum when compared to the 2.9% annual rise in wages over the last year. An increase of 10% means a property costing £1200 a month in rent before will now be £1320, without any additional benefits for the tenant.

These increases are largely due to the rise in demand for private rentals, which has tripled in the last decade due to potential buyers being priced out of purchasing a house in their desired area, or not being able to buy until much later than previous generations. The amount of social housing in the UK has also fallen, leading to a completely saturated market. Arguments have been made for bringing rent controls into London, similar to those found in Paris and Berlin, but there are concerns that this might initially reduce the number of properties available, leading to an even greater shortage.

As a result, annual rent increases are rapidly becoming a regular part of most UK residents renting experiences. To give you a better idea of what to expect, we have outlined what your landlord is legally allowed to do when it comes to increasing the rent, and what your options are when faced with this possibility.

What the law says

In theory, landlords have the right to charge as much as they want for a private property that they own and have decided to rent out. In practice, this means that they tend to work around market rates to ensure demand, as well as taking their own potential mortgage payments and profit into account.


Image credit: 401(K) 2012 Image credit: 401(K) 2012


Most Assured Shorthold Tenancy properties will be let on a Fixed Term Tenancy, during which the rent cannot be increased beyond what was initially agreed in the contract. Once the contract comes up for renewal (usually after 6-12 months), the landlord may propose a rental increase as part of a new contract. Again, this amount is up to them and there is no legal obligation to keep it to the average annual rental increase. This information must be relayed to the tenant with at least a month’s notice for tenancies shorter than a year and six months notice for a year or longer, and they then have the option of agreeing to renew the contract with the new rental price, or leaving when the current contract ends.

Your options

Try to negotiate

If possible, find out why your landlord has increase the rent. Is it due to larger mortgage repayments, or more fees being imposed by their estate agent? If there is no pressing financial reason, you may find that you can negotiate with your landlord for some property improvements in exchange for the increased rent. Appeal to their better nature and point out the benefits of having you as a tenant, particularly if you keep the place in very good condition and always pay on time. They may prefer to improve the property a little and keep you rather than have to find another tenant. As always, make sure you get the promise of any improvements in writing.

Ask for a longer Fixed Term Tenancy if you don’t already have one

In a rolling Periodic Tenancy, the landlord is legally allowed to increase the rent to market value whenever they wish, as long as they give one months written notice. However in a Fixed Term Tenancy, changes to rent can only be made at the end of the contract when it is renewed, so ask for a longer tenancy (such as 12 of 18 months) during the contract renewal to ensure that your rent won’t rise for the period that the contract remains in place.


Image credit: Turkeychik Image credit: Turkeychik


Accept the rental increase

Unless you’re in the unfortunate position of having a difficult and untrustworthy landlord, it’s likely that the rent has increased to match rising rents in your area - meaning that if you did decide to move, you’d face similar prices if you decide to stay in the same neighbourhood. If the rise is minimal or you still find the property to be reasonable value for money, it’s probably worth accepting the rise in rent.

Move out at the end of the current contract

Unfortunately, if the property no longer makes financial sense for you to stay in or you can’t afford the increase, it will be necessary to leave the property at the end of your current contract rather than renew with the increased price.


Everyone likes a summarised version of events, so here is a quick roundup of how to handle a rent increase. 

  • Negotiate with your landlord or the managing agent
  • As for a longer fixed-term tenancy
  • Accept rental increases within reason
  • Move out at the end of the current contract


Main image credit: Thomas Abbs 

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