London’s dysfunctional rental market continues to pile more misery on tenants as soaring rents, low supply and the cost of living crisis combine to create a perfect storm
The capital’s rents hit a record high of £2,193 per month in the first quarter of 2022, a 14 per cent rise on last year, according to Rightmove.
A survey by the property site last week also found a third of landlords had put rent up for their tenants. While many of these hikes are likely to be in line with inflation, stories are emerging of tenants being hit by huge hikes and in some cases being forced to move out.
But Nadeem Kham, housing adviser at Shelter’s emergency helpline, said tenants do not necessarily have to either pay up or leave. “While your landlord can suggest a rent increase, you don’t just have to agree to it — you can negotiate if you cannot afford it or think it’s too much,” she said.
So what should tenants do when faced with a sudden rent hike? And how should you negotiate with your landlord? Knowing your rights should help you stay one step ahead.
Can my landlord put my rent up?
Your landlord cannot just increase your rent whenever they like. They need to follow certain rules which depend on what type of tenancy you have. If you aren’t sure, you can check what type of tenancy you have with Shelter’s tenancy checker.
If you have an ‘Assured Shorthold Tenancy’ (AST) running for a fixed period, for example of 12 months, then your landlord cannot increase the rent unless you agree to it. If you refuse the rent rise, the landlord can only raise the rent after the fixed term period has ended.
The exception to this is if your tenancy agreement has a clause whch sets out how and when the landlord can raise the rent. This is known as having a ‘rent review clause’ and these are more common in longer tenancies.
For a periodic tenancy (rolling on a week-by-week or month-by-month basis) your landlord cannot normally increase the rent more than once a year without your agreement.
If a periodic tenant does not agree to a rent rise, landlords can serve a Section 13 notice, but these can only be used once a year.
For tenants who pay rent on a weekly or monthly basis, you must be given one month’s notice before the price increase. This changes to six months’ notice if you pay rent yearly.
What if my contract is coming to an end?
If your fixed-term contract is coming to an end, your landlord can increase your rent if you sign a new tenancy agreement.
Your new rent must be included in your new agreement or your landlord needs to tell you about the new rent amount before you sign the agreement.
How much can my landlord increase the rent by?
There isn’t a set limit on what a private landlord can increase rent by. The government says any rent increases must be “fair and realistic” which it says means in line with average local rents.
Once you pay the higher amount it legally becomes your new rent — even if you tell your landlord you are unhappy with the increase.
How do I negotiate, and what if we can’t agree?
Ask your landlord if you can pay slightly less than they’re suggesting, recommends Citizens Advice Bureau. For example, if your landlord wants to increase the rent from £750 per month to £800 per month, suggest meeting in the middle and paying £775.
Nadeem Kham, Shelter housing advisor, says: “You could explain your financial situation, offer a lower increase that you can afford, or show the higher amount is above market rent for the area and size of property.
If you can’t agree, you can appeal to a tribunal for rent complaints but as Kham says, its “usually better to try and negotiate before starting a legal process”. The tribunal is made up of two or three professionals, for example, solicitors or surveyors who will decide if your rent increase is fair.
It is important not to stop paying your current rent even if you challenge the increase — otherwise you’ll get into rent arrears and could be evicted.
If you take a landlord to a rent tribunal to dispute a rent increase, they may just try and evict you using a Section 21 no-fault eviction. The government has promised to ban these, but the legislation has not yet been brought in.
What are the rules for regulated tenancies?
The rules are slightly different for regulated tenancies. To be a regulated tenant, you must be renting your property since before 15 January 1989.
Regulated tenancies, have maximum chargeable rent set by the Valuation Office Agency and is subjected to a review every two years to keep up with the property market.
If you have questions or concerns about your rent or landlord, Citizens Advice and Shelter provide free advice.