June 23, 2023
If you’re a landlord, it’s important to keep up with current market trends and inflation rates. As the cost of living in the UK continues to rise, you may be considering a rent increase in 2023. But before you make any decisions, it’s essential to have a clear understanding of the regulations surrounding rent increases. As well as the potential impact it could have on your tenants.
What is a rent increase?
An increase in rent is a rise in rent that a tenant must pay their landlord. Typically, a rent increase occurs when the landlord decides to raise the rent due to changes in the local rental markets.
As a landlord, how do I increase the rent on my rental property?
If you feel there is a need for a rent increase, it’s always up to you to request one. However, it’s also important to consider the impact on your tenants.
When can I increase the rent on my rental property?
For a periodic tenancy (rolling on a week-by-week or month-by-month basis): You can usually only increase the rent on these types of tenancies once a year. However there are no laws currently stopping you increasing.
For a fixed-term tenancy (running for a set period): You can only increase the rent on these tenancies if the tenancy agreement permits this. Otherwise, you can only raise the rent when the fixed term ends.
So, what’s the best way to go about it?
In England, the law currently stands that landlords are entitled to increase their rents to keep up with the market rate for the type of property in the location in order for it to remain competitive.
The worst thing a landlord can do is to put the rent up all at once. Even if it’s to catch up on what has become below market rent. This is likely to be difficult for the renters to manage, particularly because their wages are likely to have increased lower than CPI. It’s also not a good way to treat renters.
During times of significant inflation, rent hikes may not be well-received. However, it’s fairer to renters to do them gradually over time, rather than in one big go.
The main rule to stick to when setting rental costs and increases is to ensure it’s fair. Research shows that over 75% of UK renters fear that they will not be able to make ends meet, this is especially true.
Although raising your prices is not necessarily a bad idea, it might be wise to conduct more thorough research on nearby rental costs, average prices, and what would be deemed fair before making any decisions.