Landlord Advice UK Tenant Eviction Service For Landlords

Rent Increase

When increasing rent for an assured or assured shorthold tenancy (AST), landlords must follow specific legal procedures to ensure the increase is valid. This guide explains how rent can be increased during both fixed-term and periodic tenancies, including statutory limitations and the use of Section 6 and Section 13 notices under the Housing Act 1988.

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Rent Increases During Fixed-Term Tenancies

For fixed-term tenancies, the rent remains the amount agreed upon at the start of the tenancy. There is no statutory method to increase rent during the fixed term unless:

1. A Rent Review Clause: The tenancy agreement includes a rent review clause allowing for increases.
2. Mutual Agreement: Both landlord and tenant agree to a new rent during the fixed term.
3. Tenant Application to Reduce Rent: In rare cases, a tenant applies to reduce the rent.

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Rent Increases for Periodic Tenancies

When a fixed-term tenancy transitions to a periodic tenancy, landlords have limited methods to increase the rent. These include:

1. Agreement with the Tenant: The landlord and tenant can mutually agree on a new rent.
2. Rent Review Clause: If the original tenancy agreement includes a rent review clause, it can be applied (except for statutory periodic tenancies).
3. Section 13 of the Housing Act 1988: A statutory process for increasing rent during periodic tenancies using a prescribed notice.
4. Section 6 of the Housing Act 1988: Applies only to statutory periodic tenancies and in limited circumstances.

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Using Section 13 Notices to Increase Rent

The Section 13 notice is the most common method for landlords to increase rent for periodic tenancies. This method requires serving a prescribed form on the tenant. Failure to use the correct form will invalidate the rent increase.

Limitations of Section 13 Notices

• Timing:
  • Section 13 cannot be used during the first 12 months (52 weeks) of a contractual periodic tenancy [1].
  • A notice of increase can be served during the fixed term of a tenancy, but the increase can only take effect after:
    • The tenancy has become a statutory periodic tenancy, and
    • The required minimum notice period has expired [2].
• Frequency: Rent can only be increased once every 12 months (52 weeks) using Section 13 [3].
• Tribunal Determinations: If a tribunal has reduced the rent for an assured shorthold tenant, an increase cannot take effect until the anniversary of that decision.

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Drafting and Serving Section 6 or Section 13 Notices

For rent increases under Section 6 or Section 13 of the Housing Act 1988, the landlord must serve the tenant with the appropriate notice, ensuring compliance with statutory requirements.

Minimum Notice Periods for Section 13

The notice period depends on the rental payment frequency:

• Weekly, fortnightly, or monthly rents: At least one month’s notice.
• Yearly rents: At least six months’ notice.

Our experts can assist in drafting and serving Section 6 or Section 13 notices to ensure the process is legally compliant.

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Important Considerations for Landlords

• Prescribed Form: Always use the prescribed form for Section 13 notices; otherwise, the rent increase will be invalid.
• Tenant Agreement: For fixed-term tenancies, mutual agreement is the easiest way to adjust rent.
• Timing and Frequency: Avoid serving notices too frequently or during restricted periods to prevent disputes.
• Tribunal Challenges: Tenants have the right to challenge excessive increases through the First-tier Tribunal (Property Chamber), which can assess and set a fair rent based on market comparables.

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Conclusion

Increasing rent under assured and assured shorthold tenancies requires careful adherence to legal processes, particularly during periodic tenancies. By understanding the rules for Section 6 and Section 13 notices and ensuring proper service of prescribed forms, landlords can navigate rent increases effectively while maintaining compliance with the Housing Act 1988.

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[1] s.13(2)(b)(ii) Housing Act 1988.
[2] s.13(2) Housing Act 1988.
[3] s.13(3A)(b) Housing Act 1988, as inserted by art.2(b) Regulatory Reform (Assured Periodic Tenancies) (Rent Increases) Order 2003 SI 2003/259.