What is a fair rent increase?

Periodic contracts: When can a landlord increase rent?

For periodic contracts, which roll on a weekly or monthly basis, landlords can only increase the rent once a year unless the contract-holder agrees to more frequent changes. This ensures contract-holders are not subjected to sudden, unexpected increases.

Fixed term contracts: When can a landlord increase rent?

In fixed-term contracts, which run for a set period (e.g., six months), rent can only be increased with the contract-holder's consent. If the contract-holder does not agree, the rent remains unchanged until the fixed term concludes.

Review clauses in occupational contracts

Including a rent review clause in the occupational contract can streamline the process. This clause should specify:

  • When the rent increase will occur
  • The notice period given to the contract-holder 
  • The method used to calculate the rent increase to ensure transparency

Darlows' Property Management services can assist landlords in managing payments and drafting comprehensive occupational contracts.

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Section 13 notices

If there is no rent review clause, landlords can use a Section 13 notice to propose a rent increase. This notice can only be issued once a year and requires:

  • At least one month’s notice for weekly or monthly contracts
  • Longer notice periods for occupations lasting more than a month (typically six months).

A Section 13 notice cannot take effect during the fixed term of a contract. For detailed guidelines, visit gov.uk.

What is a reasonable rent increase?

Landlords must get the contract-holder’s consent to increase rent beyond any previously agreed amount. The increase should reflect local market rates and property size. For instance, if local rents for one-bedroom flats average £600 per month, charging significantly more would be unreasonable.

Rental prices in the UK's private sector increased by 6.1% over the twelve months leading up to October 2023.

How much notice do I need to give to a contract-holder?

Landlords must provide sufficient notice before implementing a rent increase:

  • One month for weekly or monthly contracts
  • Six months for yearly contracts.

During a fixed-term contracts, rent increases are only possible if a rent review clause exists in the agreement.

How do I propose a rent increase?

To propose a rent increase, a landlord can:

  • Renew the occupational contract at the end of the fixed term with a new rent amount
  • Agree on a rent increase with the contract-holder, documented and signed by both parties
  • Use a 'Landlord’s notice proposing a new rent' form after the fixed term ends.

Can contract-holders refuse a rent increase?

contract-holders can refuse a proposed rent increase and appeal to a tribunal, particularly in disputes over Section 13 notices. During the appeal, contract-holders should continue paying the current rent until a decision is made.

For more advice on handling rent increase disputes, contract-holders can refer to Shelter England’s guide. If an agreement cannot be reached, the contract-holder may choose to move out. Find out more about ending an occupation here.

Advice for contract-holders and landlords from Darlows

Darlows leverages local expertise to help landlords and contract-holders achieve fair rental prices. For assistance with renting in South Wales, find your local Darlows office today.