Rent Rises in the UK: Separating Myth from Reality for Landlords

Navigating Rent Increases in 2026 and Beyond: A Landlord’s Guide to Compliance and Profitability

In the ever-evolving landscape of the UK property market, the rules governing rent increases have become a focal point of confusion and concern for landlords. With the introduction of the Renters’ Rights Act, many property owners are left questioning their ability to adjust rents in line with market dynamics while remaining compliant. We’ve all heard the whispers and the worries: “Can I raise the rent whenever I want?” or “What’s the maximum I can increase it by?” The truth is, the new rules are clearer and more predictable than you might think. This guide cuts through the noise, busts the myths, and provides a clear roadmap for landlords to confidently and legally manage rent increases. We’ll explore what you can do, what you can’t, and how to navigate the process to protect your investment and maintain a positive relationship with your tenants.

The Great Myth: “I Can Increase Rent Whenever I Want”

Let’s tackle the most pervasive myth head-on: the belief that landlords have free rein to increase rent at will. This is unequivocally false. Under the Renters’ Rights Act, the process is structured and regulated. For periodic tenancies, you can only increase the rent once per year, and you must provide a formal two-month notice. This is a fundamental shift from the old rules, which offered more flexibility. The new legislation prioritizes tenant security and predictability, making it crucial for landlords to understand and adhere to the new framework.

The Legal Framework: What the Law Demands

To ensure you remain on the right side of the law, it’s essential to understand the five core requirements for increasing rent on a periodic tenancy:

1. Once Per Year: You can only increase the rent once in any 12-month period. For example, if you increase the rent on 15th January 2026, you cannot do so again until 15th January 2027.

2. Formal Section 13 Notice: A simple letter or email is no longer sufficient. You must serve a formal Section 13 notice, which includes your name and address, the tenant’s details, the property address, the current and new rent amounts, the date the new rent takes effect, and information about challenging the increase.

3. Two Months’ Notice: You must give at least two months’ notice before the increase takes effect. The notice period is counted from the date the tenant receives the Section 13 notice.

4. Specify the New Rent Amount: The notice must clearly state the new rent amount. Vague statements are not acceptable.

5. The Increase Must Be Reasonable: This is the most subjective requirement. Tenants can challenge excessive increases at a tribunal. The tribunal will assess whether the new rent is in line with market rates for similar properties in the area.

Understanding “Reasonable”: The Tribunal’s Perspective

When a tenant challenges a rent increase, the tribunal will consider several factors to determine if it’s reasonable:

• Comparable Market Rent: The tribunal will research what similar properties in the area are renting for.

• Market Conditions: A rising market may justify a larger increase, while a stable or falling market will call for more modest adjustments.

• Property Condition: Improvements to the property can justify a higher rent, while a property in poor condition will make an increase harder to justify.

• Tenant’s Circumstances: The tribunal may consider the tenant’s history, such as being a good, long-term tenant.

• Frequency of Previous Increases: A history of frequent increases may lead the tribunal to question the pattern.

• Any Improvements Made: Recent upgrades or renovations can support a larger increase.

As a general guide, a 5-10% increase is likely to be accepted, a 10-15% increase may be challenged, and a 15%+ increase is very likely to be challenged and reduced.

The Renters (Reform) Bill: What’s on the Horizon?

The Renters (Reform) Bill, which is expected to become law, will bring further changes to the private rented sector. While the bill is still subject to amendments, it’s crucial for landlords to be aware of the direction of travel. The bill aims to abolish Section 21 “no-fault” evictions, strengthen Section 8 grounds for possession, and introduce a new property portal for landlords. The changes to rent increases are a key part of this reform, and staying informed is the best way to prepare your portfolio for the future.

Strategic Advice for Landlords

In this new regulatory environment, a proactive and informed approach is essential. Here are some strategic tips for managing rent increases:

• Stay Informed: Keep up to date with the latest legislation and guidance.

• Communicate with Your Tenants: Open and honest communication can prevent disputes. • Document Everything: Keep detailed records of all communication, notices, and agreements.

• Be Realistic: Set rents that are fair and in line with the market.

• Seek Professional Advice: Don’t hesitate to seek guidance from a property management expert.

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Frequently Asked Questions (FAQs)

1. Can I increase the rent during a fixed-term tenancy?

   Only if there is a rent review clause in the tenancy agreement or if the tenant agrees to the increase. Otherwise, you must wait until the fixed term ends.

2. What happens if I don’t use a Section 13 notice?

   The rent increase will be invalid, and the tenant will not be legally required to pay the higher amount.

3. Can a tenant refuse a rent increase?

   A tenant can challenge a rent increase they believe is unreasonable by applying to a tribunal.

4. What is the Renters (Reform) Bill?

   It is a new piece of legislation that will bring significant changes to the private rented sector in the UK, including the abolition of Section 21evictions and new rules for rent increases.

   
   

Your Partner in Property Management

Navigating the complexities of the UK property market can be challenging, but you don’t have to do it alone. At Essential Management Ltd, we provide expert guidance and strategic perspective to help landlords thrive. If you’d like to explore how these changes apply to your portfolio, our team is here to help.

Professional Disclaimer;  This article provides general guidance only. Always seek independent legal, tax, or financial advice before making decisions affecting your property or business.