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Increasing rent (England, Wales & Northern Ireland)

Contents

The following applies to assured and assured shorthold tenancies in England and Wales, and all tenancy agreements in Northern Ireland.

How often can I raise the rent?

The frequency of any rent reviews depends on whether this has been incorporated in the terms of the tenancy agreement.

Details of the arrangements for paying and, if you wish, for reviewing, the rent should be agreed, before the tenancy begins and included as part of the terms of the tenancy agreement.

  • If the tenancy is for a fixed term, the agreement should say that the rent will be fixed for the length of the term or, that it will be reviewed at regular intervals and how it will be reviewed.
  • If the tenancy is a contractual periodic tenancy, the tenancy agreement should say how often the rent will be reviewed and how it will be reviewed.

What is the difference between a fixed-term and periodic tenancy?

  • A fixed-term tenancy is created for a specified length of time, for example, 12 months. If the tenants remain in the property after the fixed term has ended, but do not enter into a new fixed-term agreement, then their tenancy will automatically become periodic.
  • A periodic tenancy is automatically renewed on a specific period, such as month to month or quarter to quarter. This arrangement may have been specified at the start of the tenancy or may have naturally arisen by the expiry of a fixed-term tenancy. A periodic tenancy formed by an agreement is known as a contractual periodic tenancy. A periodic tenancy formed at the expiry of a fixed term is known as a statutory periodic tenancy.

If the agreement doesn't state when the rent should be reviewed

England & Wales

If the tenancy agreement does not state when rent reviews will take place then the frequency of the reviews will be determined by the Housing Act 1988.

  • If the tenancy is a fixed-term tenancy, you can only increase the rent if the tenant agrees. Otherwise you will have to wait until the fixed term ends before you can raise the rent. Once the fixed term ends and the tenancy lapses into a statutory periodic tenancy, you can either agree a rent increase with the tenant or you follow a formal procedure set out by the Housing Act 1988 to propose a rent increase to be payable as soon as the statutory tenancy starts. You can then propose further increases at yearly intervals after the first increase.
  • If the tenancy is a contractual periodic tenancy, then you can increase the rent if the tenant agrees. Otherwise you can follow a formal procedure set out by the Housing Act 1988 (see below) to propose a rent increase to be payable a year after the tenancy began. You can then propose further increases at yearly intervals after the first increase.

What is the procedure in the Housing Act 1988 for proposing a rent increase where this is not covered in the tenancy agreement?

You must notify the tenant by sending them one of 2 special forms entitled 'Landlord's notice proposing a new rent under an Assured Periodic Tenancy of premises situated in England' or 'Landlord's notice proposing a new rent under an Assured Periodic Tenancy of premises situated in Wales'.

You must give at least a month's notice of the proposed increase if the rent is paid on a weekly or monthly basis.

If the tenant agrees with the proposed rent increase, they should simply pay it from the date given in the notice.

If the tenant does not agree with the proposed increase, they must apply to the First-tier Tribunal in England, or to a rent assessment committee in Wales, to decide what the rent should be. The tenant must do so before the date on which the new rent is due to begin.

Northern Ireland

In Northern Ireland, the landlord can only increase the rent by more than was stated in the tenancy agreement if the tenant agrees.

If the tenancy agreement is silent on rent review then the landlord has to get the consent of the tenant to increase the rent during the tenancy. If the tenancy is for a fixed term, then the landlord can increase the rent at the end of the fixed term and where the tenancy is a periodic tenancy the landlord can increase the rent at the end of any rental period.

Where the tenancy is controlled, the landlord can only increase the rent by applying to the Rent Officer.

For more information on the Rent Officer for Northern Ireland, please visit the NI Direct website.

For fixed-term tenancies, as a rent increase is classed as a change to the terms of the tenancy, once this is agreed with the tenant, the landlord must notify the tenant of the changes in writing at least 28 days before they are due to take place. For periodic tenancies, the terms can be changed at the end of any rental period.

First-tier Tribunal and rent assessment committees

England & Wales

The First-tier Tribunal in England, and the rent assessment committees in Wales, are tribunals made up of 2 or 3 people - usually a lawyer or a property valuer, and one or 2 lay people. They are generally appointed by government ministers.

In England, the First-tier Tribunal - Property Chamber (Residential Property) has 5 regional offices. In Wales, the rent assessment committees are part of the Residential Property Tribunal Wales. The First-tier Tribunal and rent assessment committees are independent of both central and local government.

The following sets out the hearing process of the First-tier Tribunal in England. However, the same process also applies to hearings in rent assessment committees in Wales.

What does it cost and is there a hearing?

There is no charge for a Tribunal decision. The Tribunal can make a decision by just considering the relevant papers, but you or the tenant can ask for an informal hearing, which you can both attend.

When can a tenant with an assured or an assured shorthold tenancy apply to the Tribunal?

  • Assured and assured shorthold tenants can ask the Tribunal to set a rent under a contractual periodic or statutory periodic tenancy if you have given notice of an increase
  • Assured shorthold tenants can ask the Tribunal to set a rent if they apply within the first 6 months of the tenancy if they feel the rent is significantly higher than rents for comparable tenancies. An application can't be made if the original tenancy has ended and been replaced, and more than 6 months have elapsed since the date the original tenancy started.

How does the Tribunal decide on a rent for a periodic tenancy?

When settling disputes on rent, the Tribunal decides what rent you could reasonably expect for the property if you were letting it on the open market under a new tenancy on the same terms. It doesn't take into account any increase in the value of the property due to voluntary improvements by the tenant or any reduction in the value of the property caused by the tenant not looking after the property.

The Tribunal can agree the proposed rent or set a higher or lower rent.

The rent fixed by the Tribunal is the legal maximum you can charge. The new rent will be payable from the date specified in your notice unless the Tribunal considers this would cause the tenant undue hardship in which case it may specify a later date.

How does the Tribunal decide on a rent for an assured shorthold tenancy?

The Tribunal will only fix a rent if it considers the rent to be significantly high compared with rents for similar properties let on assured or shorthold tenancies in the local area. It will not make a decision if there are not enough comparable properties. It will decide the amount of rent you could reasonably expect to get for the shorthold tenancy, taking into account those other rents.

The rent fixed by the Tribunal is the legal maximum you can charge. The new rent will be payable from the date specified by the Tribunal which can't be earlier than the date the tenant applied to it for a decision.

Can I propose a further rent increase after the Tribunal has made a decision?

You can propose that the rent is increased a year after the date on which the rent decided by the Tribunal was payable, unless the tenant agrees that you can put the rent up earlier. The tenant must apply to the Tribunal to decide what the rent should be if they don't agree with the amount of the proposed increase.

Northern Ireland

In Northern Ireland, the rent assessment committee is a body that the landlord can apply to, in order to increase the rent on controlled tenancies, i.e. properties where a notice of unfitness has been issued.

See the section on How to set up a tenancy under the Certificate of fitness (Northern Ireland only) heading for more information.

What if I want to change the terms of the tenancy?

If the tenancy is a fixed-term or contractual periodic tenancy, you can only change the terms of the tenancy if the tenant agrees. In England and Wales, it is best to agree any changes in writing. In Northern Ireland, these changes must be confirmed in writing and the tenant must be given at least 28 days' notice prior to the changes taking effect.

However, if the fixed term of an assured or an assured shorthold tenancy or a tenancy agreement in Northern Ireland has ended and the tenancy has automatically run on as a periodic tenancy, it will continue on the same terms unless you, or the tenant, propose new terms.

In England and Wales, you or the tenant may propose new terms, and any consequent change to the rent, within a year of the statutory periodic tenancy starting, using a special procedure under the Housing Act 1988. You both have the right to apply for an independent decision by the First-tier Tribunal in England or a rent assessment committee in Wales if you can't agree new terms.

In Northern Ireland, you must agree any changes with the tenant and written confirmation of the changes, once agreed, must be forwarded to the tenant at least 28 days before the changes are due to take effect.

How does this procedure work in England and Wales?

In England and Wales, you, or the tenant, must propose the new terms, and any consequent change to the rent, on a special form called 'Notice proposing different terms for a Statutory Periodic Tenancy'. If you both agree the new terms, they can be included in the agreement.

In England, if the terms aren't agreed, you or the tenant must apply to the First-tier Tribunal to settle the terms and any consequent change to the rent. You, or the tenant, must apply to the Tribunal within 3 months of receiving the notice proposing changes, using a special form called 'Application referring a notice proposing different terms for a statutory periodic tenancy to the Tribunal.

The same applies in Wales, but instead the form 'Application referring a notice proposing different terms for a statutory periodic tenancy to a rent assessment committee' must be used.

The following sets out the decision-making process of the First-tier Tribunal in England. However, the same process also applies to rent assessment committees in Wales.

How does the Tribunal fix the terms?

The Tribunal decides whether the proposed new terms are reasonable for the tenancy or whether other terms are more appropriate. The Tribunal might adjust the rent up or down to reflect the new terms, whether or not you or the tenant proposed a new rent to match the new terms.

The new terms and the new rent, if the Tribunal decides that the rent should be changed, will apply from the date that it states, but it can't apply the new rent before the date proposed in the notice.

If the Tribunal sets new terms, can I propose further changes?

You can only make further changes to the terms of the statutory periodic tenancy if the tenant agrees.

What can I do if I don't like the Tribunal's decision?

The Tribunal's decision is binding on the parties. You have a right to appeal against it, but only in relation to a legal issue and not a factual dispute. In both England and Wales, the appeal should be made to the Upper Tribunal (Lands Chamber). You'll need to get permission to appeal from either the body that has made the decision or the Upper Tribunal. The appeal should be made within 28 days of receiving the full reasons for the decision.

Alternatively, if you think that there has been a breach of the rules of natural justice, you could seek leave from the High Court to challenge the decision by judicial review.