Procedure for increasing rents in England and Wales
During a tenancy, the landlord may wish to increase the rent paid by the tenant. It is easiest for the landlord and tenant to come to an agreement as to the new rent to be paid, but if this is not possible section 13 Housing Act 1988 (HA 1988) provides a statutory procedure for rent increases. This factsheet describes the procedure for increasing rent on an assured or assured shorthold tenancy under the Housing Act 1988, and will not apply to other forms of residential tenancy such as a common law tenancy.
Methods to Increase Rent:
If a landlord wishes to increase the rent payable under an assured tenancy or assured shorthold tenancy, depending on the circumstances several options may be open to him.
- RENT INCREASE PROVISION IN TENANCY AGREEMENT - The landlord will be contractually entitled to increase the rent during the term in accordance with any provision in the tenancy agreement allowing for this. Such a provision should set out exactly what the landlord wants to be able to do, and should state the basis on which it will be assessed and the occasions on which such a review will occur. If the tenancy agreement does include such a term, the statutory procedure cannot be used. If the tenancy is for a fixed term, the landlord cannot increase the rent without the agreement of the tenant unless the tenancy agreement provides for this.
- AGREEMENT TO GRANT A NEW FIXED TERM TENANCY - The landlord will have the opportunity to increase the rent if he grants the tenant a new tenancy. If the current tenancy is continuing the landlord will need the tenant to agree to enter a new tenancy, and this will operate to surrender the previous tenancy and grant an entirely new tenancy. If the tenant does not agree to terminate the current tenancy, the protection provided to the tenant by the HA 1988 means that unless the landlord is able to use either a break clause in the tenancy agreement or section 8 or section 21 HA 1988, the landlord will need to wait for the current tenancy to expire. Any new tenancy offered can then be at an increased rent.
- AGREEMENT TO GRANT A NEW PERIODIC TENANCY - If the tenancy is a periodic tenancy, instead of allowing the current tenancy to keep continuing from period to period the landlord may agree to grant the tenant a new periodic tenancy at a higher rent. Again, if the tenant agrees to enter a new tenancy before the current tenancy expires, this operates to surrender the previous tenancy and grant an entirely new tenancy. However, if the tenant is not amenable to the increase, the landlord will need to increase the rent by using the statutory procedure under section 13 –explained further below.
- INVOKING STATUTORY PROCEDURE - If the landlord and tenant cannot agree that the rent payable under a periodic tenancy should be increased, the landlord may instigate a rent increase by serving a notice on the tenant under section 13 HA 1988. The tenant then has the choice of accepting the proposed new rent and making arrangements to pay this from the date specified in the notice, or they may refer the notice to their local tribunal (First-tier tribunal - Property Chamber in England and Rent Assessment Committee in Wales).