The ‘key steps’ tenants should take when facing an rent increase

Cost-of-living: Expert shares advice to save money on bills

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Britons across the UK who live in rental accommodation are facing even further financial stress on top of rising inflation and energy bills as landlords are also increasing the monthly cost of their homes. Sophie Bell, housing solicitor and partner at Hodge Jones & Allen, said this was having a “significant impact” on those in the private rental sector. She said: “People now faced with ever-increasing petrol, food and energy costs are also struggling with rental payments. These are all basic necessities which are becoming unaffordable.”

Ms Bell highlighted that there was actually “no cap” on how much a landlord can charge for their rental property. However, Government guidance states rent increases for existing tenants must be “fair and realistic” and in line with “average local rents”.

She explained: “Depending on the type of tenancy, there are a number of steps landlords must take if they attempt to increase the rent on their property but tenants can challenge the increase if they believe theirs hasn’t followed the correct procedures.” 

Ms Bell highlighted that landlords are not able to up the rent “whenever they like or by any amount”. 

She said: “If a tenant is residing in a fixed term tenancy, one that lasts for a set duration of time, a landlord can only increase the rent if the tenant agrees, while if the rise is rejected the rent can only go up once the agreed tenancy period has come to an end.  

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“However, if the lease contains a rent review clause the landlord must give sufficient notice before the rent increase comes into force, usually being at least six months for a yearlong tenancy.”

To be enforceable, Ms Bell stated the rent review clause does not need to be very specific, as it does not need to specify how much, or when the rent will increase.

The clause in the contract only needs to explain the process the landlord will take to increase the rent such as informing the tenant two months beforehand. By doing this, it won’t be classed as “unfair” under consumer protection law.

She added: “If a tenant is involved in a periodic tenancy, one that is paid on a rolling week-by-week or month-by-month basis, then landlords cannot increase the rent more than once a year without consent, and only if at least one month’s notice is provided. 

“The landlord may also serve a section 13 notice, where on expiry of the notice period the increased rent will take effect unless the tenant refers the increase to the tribunal or a different rent is agreed.”

If these steps are not undertaken, Ms Bell states there are routes tenants can take to challenge the increase with the first step being to open a negotiation with the landlord.

To negotiate, Ms Bell recommends that people write to their landlord and set out a rent which they believe is fair and reasonable and that they a willing to pay. 

If an agreement is not met through this and a tenant believes their landlord has not followed the rules then they can appeal to a tribunal which is free to do. 

Ms Bell said: “The tribunal will decide whether the increase is reasonable based on the rate of rent of similar properties in the area. 

“Their decision is final, so if they decide the increase is reasonable, you’ll have to accept it, or decide to leave the property. If they decide it is unfair, then they may decide it should be left as it is or set at a higher rate.”

Ms Bell warned that a tribunal can set the rent even higher than what the landlord was seeking if it is in line with local rents. Due to this, people should only appeal where the rent being sought by the landlord is “clearly above local levels”. 

Ms Bell highlighted that people are able to not pay the increased rent if the landlord fails to give correct notice or fails to operate a rent review clause in the tenancy agreement. 

If this is the case, people are able to continue paying the rent at the existing rate without repercussions. 

However, Ms Bell added: “If you were to pay the increased rent, even once, the landlord may be able to argue that you have agreed to the increase, in which case it will be binding. This is the case, even if nothing has explicitly been said between you both.” 

Ms Bell urges people to continue paying their current level of rent even if they plan to challenge it. If a person falls into rent arrears it could allow a landlord to bring possession proceedings against the tenant and could ultimately just lead to eviction from the property alongside a large debt. 

In June last year, the Government published its white papers for its Renters Reform Bill which outlined the plan to ban Section 21 notices or the “no-fault evictions”.

It said the measure aimed to give tenants “piece of mind” and “ease the financial burden” of moving costs and emergency repairs when faced with eviction.

However, Ms Bell stated that the Government is “dragging its feet” with the measure as renters now face the “valid fear” of losing their home and those who are struggling to meet their bills are now having to make the choice between “a roof, food and heat” and that “no one living in modern times” should have to make this choice. 

She highlighted that the Government has also frozen local housing allowance rates for 2022 which means that housing benefit rates are not increasing in line with inflation. 

Ms Bell said: “In the light of the current situation, being able to budget is ever more important, so certainty on the level of rent is essential. 

“I worry that landlords will put rents up in order to be able to meet their own additional liabilities.  This though is going to have a devastating effect on already struggling renters and ultimately could precipitate a concerning rise in homelessness.”

Ms Bell supports the idea of a “rent freeze” similar to the one which the First Minister of Scotland Nicola Sturgeon announced earlier this month. 

From its publication date on September 6, Scottish landlords are unable to increase the rent of their properties until at least the end of March next year and cannot evict tenants in the Scottish rental market.

The measure was put in place to protect Scottish renters during the cost of living crisis which Ms Strurgeon states is “pushing millions into poverty and poses a genuine danger, not just to livelihoods, but to lives”. 

Ms Bell added: “If nothing is going to be done about rising costs of living or increasing housing benefits in line with those, it is imperative that the rent levels are controlled”.

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