Rent Increases Under the Renters' Rights Act: What Landlords Need to Know

The Renters' Rights Act has raised questions among landlords, particularly around rent increases. Let's address the key concerns: Can you still increase rent? Yes. However, the framework has evolved, and compliance is now more critical than ever.

The updated rules are clear: maximum one increase per 12-month period, minimum 2 months' notice, increases must reflect prevailing market rates, and tenants can challenge disproportionate increases via tribunal.

This guide explains the new rules, their strategic implications, and how to approach rent increases professionally under the new framework.

The Updated Rules: What's Changed

Rule 1: Maximum One Increase Per 12-Month Period

What It Means:

You can increase rent a maximum of once every 12 months. You cannot increase rent more frequently.

Practical Implications:

•Plan rent increases annually, not more frequently

•Track the date of each increase

•Ensure 12 months have passed before next increase

•Document all increases

Example:

If you increase rent on January 1, 2026, you cannot increase again until January 1, 2027.

Rule 2: Minimum 2 Months' Notice

What It Means:

You must provide minimum 2 months' written notice before a rent increase takes effect.

Practical Implications:

•Serve notice at least 2 months before increase date

•Provide written notice (email, letter, or formal notice)

•Document notice service

•Ensure tenant receives notice

•Allow 2 months for tenant response

Example:

If you want to increase rent effective April 1, 2026, you must serve notice by February 1, 2026.

Rule 3: Increases Must Reflect Prevailing Market Rates

What It Means:

Rent increases must be justified by current market rates for similar properties in your area. You cannot increase rent arbitrarily.

Practical Implications:

•Research comparable properties in your area

•Document market rates

•Ensure your increase aligns with market rates

•Be prepared to justify increase with data

•Avoid excessive increases above market rates

Example:

If similar 3-bed properties in your area rent for £850-900/month, increasing from £750 to £1,100 would likely be challenged as disproportionate.

Rule 4: Tenants Can Challenge Disproportionate Increases

What It Means:

Tenants have the right to challenge rent increases they consider disproportionate via tribunal. Tribunals can set lower rents if they deem increases unreasonable.

Practical Implications:

•Expect potential challenges to excessive increases

•Be prepared to defend your increase with market data

•Understand that tribunals can reduce increases

•Avoid using rent increases as de facto eviction strategy

•Focus on fair, justified increases

Example:

If you increase rent by 20% when market increases are 5%, a tenant could challenge the increase, and a tribunal might reduce it to 5-8%.

Strategic Implications for Landlords

Implication 1: Robust Market Data is Essential

What It Means:

You now need strong, documented market data to justify any rent increase. Comparable property analysis is essential, not optional.

What You Need to Do:

•Research comparable properties regularly

•Document market rates for your property type

•Track market trends over time

•Keep records of research

•Be prepared to present data if challenged

How to Gather Data:

Use online platforms (Rightmove, Zoopla, SpareRoom) to research comparable properties. Document location, size, amenities, and rental price for each comparable. Calculate average market rate and identify your property's position. Keep all documentation for at least 3 years.

Implication 2: Excessive Increases Are No Longer Viable

What It Means:

Using rent increases as a de facto eviction strategy is no longer viable. Tribunals will intervene if increases are deemed unreasonable.

What It Means for You:

•You cannot use excessive increases to force tenant departure

•You must use legitimate grounds for possession if eviction is needed

•Excessive increases expose you to tribunal challenges

•Tribunals can set lower rents, reducing your returns

•Focus on fair increases instead

Example:

Previously, a landlord might increase rent by 30% to force a tenant to leave. Under the new rules, a tribunal would likely reduce this to a reasonable increase (5-10%), and the tenant could remain.

Implication 3: Fair Pricing Reduces Dispute Risk

What It Means:

Fair, transparent, data-driven increases significantly reduce the likelihood of tenant challenges and tribunal disputes.

What It Means for You:

•Fair increases maintain tenant relationships

•Fair increases reduce dispute risk

•Fair increases reduce tribunal risk

•Fair increases demonstrate professionalism

•Fair increases build long-term portfolio stability

Example:

An increase of 5-6% supported by market data is unlikely to be challenged. An increase of 15% without clear justification is very likely to be challenged.

The Professional Approach: Data-Driven Decision-Making

Step 1: Research Market Rates

Research comparable properties in your area to determine fair market rates for your property type.

What to Research:

•Properties similar to yours (location, size, amenities)

•Current rental prices for each comparable

•Average rental price in your area

•Price range (low to high)

•Market trends (increasing, stable, decreasing)

How to Use the Data:

Determine where your property sits in the market. If your property is below market rate, a modest increase toward market rate is justified. If your property is at or above market rate, increases should be minimal or tied to cost increases.

Step 2: Calculate Legitimate Cost Increases

Identify legitimate cost increases that justify a rent increase.

Legitimate Costs:

•Mortgage rate increases

•Insurance premium increases

•Council tax increases

•Maintenance and repair costs

•Compliance costs (safety checks, EPC, etc.)

How to Use the Data:

Calculate total cost increases and determine what portion should be passed to tenants through rent increases. A reasonable approach is to pass through 50-75% of cost increases to tenants, absorbing the remainder yourself.

Step 3: Determine Fair Increase Amount

Combine market research and cost analysis to determine a fair increase amount.

Fair Increase Guidelines:

•Inflation-based: 2-4% annually (matches inflation)

•Market-based: Increase to market rate (if currently below)

•Cost-based: Reflect actual cost increases

•Blended: Combination of above approaches

Recommended Range:

A fair increase is typically 4-6% annually, reflecting inflation plus modest cost recovery. This balances landlord and tenant interests while remaining defensible.

Step 4: Communicate Transparently

Communicate the increase clearly, explaining what's changing and why.

Communication Elements:

•Current rent and new rent

•Increase amount and percentage

•Reason for increase (market rates, cost increases)

•Supporting data (market research, cost breakdown)

•Effective date

•Notice period (minimum 2 months)

Communication Tone:

Be professional, transparent, and respectful. Acknowledge that increases are difficult for tenants. Show that the increase is fair and justified. Invite questions and concerns.

Avoiding Common Mistakes

Mistake 1: Increasing Without Market Data

The Mistake:

Increasing rent without researching market rates or documenting justification.

Why It's a Problem:

Tenants can challenge the increase, and you'll have no data to defend it. Tribunals can reduce the increase.

How to Avoid It:

Always research market rates before increasing rent. Document your research. Be prepared to present data if challenged.

Mistake 2: Excessive Increases

The Mistake:

Increasing rent by 15%+ without clear justification.

Why It's a Problem:

Excessive increases are likely to be challenged. Tribunals will likely reduce them. You may lose the tenant and face tribunal costs.

How to Avoid It:

Keep increases reasonable (4-6% annually). Ensure increases are justified by market data or cost increases. Avoid using increases as eviction strategy.

Mistake 3: Inadequate Notice

The Mistake:

Providing less than 2 months' notice of rent increase.

Why It's a Problem:

The increase may be invalid. Tenants can challenge it. You may need to re-serve notice.

How to Avoid It:

Always provide minimum 2 months' written notice. Document notice service. Confirm tenant receives notice.

Mistake 4: Poor Communication

The Mistake:

Increasing rent without explanation or justification.

Why It's a Problem:

Tenants feel blindsided. They're more likely to challenge the increase. Disputes and tribunal cases result.

How to Avoid It:

Communicate transparently. Explain what's changing and why. Provide supporting data. Invite questions. Be professional and respectful.

Mistake 5: Ignoring Tribunal Precedent

The Mistake:

Ignoring tribunal decisions and continuing excessive increases.

Why It's a Problem:

Tribunals establish precedent. Repeated excessive increases invite challenges and tribunal intervention.

How to Avoid It:

Monitor tribunal decisions. Understand what increases are considered reasonable. Adjust your approach accordingly.

You Can Still Increase Rent

The Renters' Rights Act doesn't prevent rent increases. It establishes clear rules and requires fair, justified increases.

The Rules Are Clear

Maximum one increase per 12 months, minimum 2 months' notice, increases must reflect market rates, and tenants can challenge disproportionate increases.

Market Data Is Essential

Robust market research is now essential, not optional. You must be able to justify any increase with data.

Fair Pricing Protects You

Fair, transparent, data-driven increases reduce dispute risk and tribunal challenges. Professional landlords who follow these principles are well-positioned.

Excessive Increases Are No Longer Viable

Using increases as de facto eviction strategy no longer works. Tribunals will intervene. Focus on fair increases instead.

Ready to Master Rent Increases Under the New Rules?

If you need help navigating rent increases under the Renters' Rights Act, professional guidance is available.

Contact us on WhatsApp: +44 330 341 3063

We can help you:

•Research market rates for your property

•Determine fair increase amounts

•Prepare transparent communication

•Navigate tribunal challenges

•Ensure compliance with new rules

•Maintain positive tenant relationships