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How much can a UK Landlord Raise the Rent in a Year

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The prices of property in the UK are rising steadily, and that is no secret. Since the Covid-19 pandemic, it seems that buying a house has become cheaper than renting a house in the UK. As per the data, owning a house in the UK is £1,400 cheaper than buying a house in the UK in 2022, per year. If you have been thinking about buying a house in the UK, now might be as good a time as any to book your free property valuation. Rental prices are on the rise, property prices are sky high and the rate of inflation is slowly increasing too. Will this impact current renters and leaseholders? How much can a UK landlord raise the rent in a year? Here is everything that you need to know.

Can landlords in the UK increase rental prices?

The simple answer, yes they can. However, landlords cannot increase rental prices on a whim. There are certain rules and regulations in the UK regarding rental increases which landlords have to follow. For assured shorthold tenancy agreements, which are on a weekly basis or monthly basis, a landlord cannot increase the rent more than once a year without the consent of the tenant. For fixed term tenancy agreements, which are long-term rental agreements, a landlord can only increase the rent once the tenant agrees. If the tenant does not agree to the increase in rent, then the rental can only be increased once the lease term ends.

By how much can a landlord increase the rent in the UK?

Usually, the rent increases in proportion to the rate of inflation. Usually, a landlord increases the rent by 3 per cent to 5 per cent per year. However, by law, landlords are required to raise the rent fairly and realistically, which means they cannot double the rent at a whim. The rent increase must be in line with the average rental price of similar properties in the area. For instance, if a tenant is paying a yearly rental of £6000, then a landlord can propose to increase the monthly rental by say 5 per cent, which in turn will make the new rental price £6300. A landlord cannot legally increase the price from £6000 to £8000, as that would not be in proportion to the rate of inflation.

How can a landlord increase the rent?

First, there has to be a written agreement or a written record showing that the tenant and the landlord have agreed to the increase in rent. Usually, a landlord does not have to give a tenant a notice if the landlord is giving the tenant a new contract with the increased rent. Of course, the new rent is not payable until and unless the tenant agrees to the increase in rent. Both the tenant and the landlord have to agree to the rent increase, in writing.

In the case of fixed-term tenancy, a landlord has an option to renew the lease agreement with the increased rent. Also, the landlord has to issue the Section 13 rent increase notice, which is the “assured tenancy form” that is used to propose an increase in rent after the fixed tenancy term is over.

What if a tenant is not happy with the increase in rent?

As a tenant, if you are unsure whether the rent is fair or not, you can always research the rent of similar properties in the area. This will give you a good idea of the average rental price in the area and you will be able to assess whether the rent increase is fair or not. If you feel that the rent has been increased unfairly or by too much, you can always dispute the matter. This is allowed even if you have agreed to the increase in rent. Then, a tribunal will determine whether or not the rent increase is fair, and if it is legal.

Can a landlord increase the rent without any notice?

No, a landlord cannot increase the rent without giving notice. By law, a UK landlord is required to give a notice to the tenant regarding the raise in rent. The notice period varies; landlords are required to give one month’s notice for weekly rentals and monthly rentals while a six-month notice is required for yearly rentals.

Essentially, a landlord can increase the rent, but only after sending you the tenant a notice. Both the tenant and the landlord have to agree to the rise in rent and all rent increases must be fair, realistic and legal.

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