What landlords need to know when reviewing rental pricing

How and when rental pricing can be reviewed

The tenancy agreement (opens in a new window) between you and your tenant(s) should include how and when the rent will be reviewed. It's important to note that there are special rules for increasing protected (sometimes known as 'regulated') tenancy rents (opens in a new window).

For a periodic tenancy (rolling on a week-by-week or month-by-month basis) landlords cannot normally increase the rent more than once a year without agreement from the tenant.

For a fixed-term tenancy (running for a set period) landlords can only increase the rent if agreed by the tenant. If the tenant does not agree, the rent can only be increased when the fixed term ends.

Rules around rent increases

For any tenancy:

• you must get permission from a tenant if you want to increase the rent by more than previously agreed
• the rent increase must be fair and realistic, which means in line with average local rents.

How landlords must propose a rent increase

If the tenancy agreement lays down a procedure for increasing rent, you must stick to this. Otherwise, as a landlord you can:

• renew the tenancy agreement at the end of the fixed term, but with an increased rent
• agree a rent increase with the tenant and produce a written record of the agreement that you both sign
• use a 'Landlord's notice proposing a new rent' form, which increases the rent after the fixed term has ended.

Important: you must give tenants a minimum of one month’s notice if they pay rent weekly or monthly. If they have a yearly tenancy, you must give them 6 months’ notice.

Is your rental pricing appropriate?

Choosing to be a landlord is often for investment purposes and rent is how landlords make a return on their investment. When costs increase it's inevitable that rent will need to. However, to maintain strong tenant / landlord relationships it's important that rent increases are appropriate and not disproportionate in order to increase profit.

For landlords, it can be a tricky task keeping up with property pricing and specifically whether you're charging appropriate rent for their property. Navigating what's going on in the local market is a good starting point. Aim to understand what rental prices surrounding your property are and what fluctuations there are in supply and demand.

The table below shows the annual percentage changes in private rental prices across the UK and its regions over 12 months to March 2023:

*Source: Index of Private Housing Rental Prices, UK: March 2023 (opens in a new window)