When can rental values change?
Rent levels are close to the hearts of both landlords and tenants, who usually have different views on the subject. There are two main factors: legal requirements and market forces.
Successful landlords obey the former and work with the latter.
Can I put the rent up during a tenancy?
In a word: no. An Assured Shorthold Tenancy (AST) guarantees the tenant the right to occupy your property in exchange for paying the rent (this is a simplification, but the premise still stands). The amount of rent is fixed and cannot be changed during a tenancy unless both parties agree.
Can I put the rent up if my tenant surrenders the tenancy?
We would advise against it. A ‘surrender’ is when your tenant wants to leave their tenancy before the end of it. They are still legally liable for the rent until the property is re-let. We advise re-marketing the property at the same rent: if you ask for more rent than the tenant is paying, it may prevent re-letting, and this would not be seen as fair if the surrendering tenant brought the case up for review. If there is little demand due to the time of year, you may need to lower the asking rent and the surrendering tenant will be liable for the difference between their rent and the incoming tenant’s rent.
What rent increase am I getting this year?
You cannot assume that you will always get a rent increase. ASTs do not have clauses stating that rent reviews only go up – they are unlike ‘upward only’ commercial rent clauses. If you run fixed-term tenancy agreements (as we do), then you renegotiate the rent upon renewing the tenancy. You put a rent to the tenant and they can accept or decline it; it is a negotiation in which market forces are the guide.
Can I build rent increases into the original tenancy agreement?
Yes, we do this and it works well. Normally we put an ‘RPI increase’ clause in every 12 months.
Can I put the rent up if the tenancy has gone Periodic?
Yes. You need to issue the correct legal notice to warn the tenant and you must give them at least one rent payment period’s notice. The tenant can respond with their own legal notice if they do not agree. From there it is a negotiation which, if not settled, can go to the First-Tier Tribunal, which is rare.
This is one of the 50 most asked questions in our book: Landlord Intelligence