Tenants and landlords are in a bit of a pressure cooker right now!

Increasing mortgage rates, a heated rental market, and higher prices for daily essentials including utilities, are all contributors. Unsurprisingly, raising the rent is a hot and sensitive topic between landlords and tenants.

Raising the rent is invariably a sore point between landlords and tenants. Let’s be honest, no-one likes the idea of paying more for anything, but price increases are often inevitable – rents respond to what’s happening in the wider social and economic environment. Landlords set rents based on several factors, including market conditions and their own financial considerations. When these factors change, landlords may look to adjust the rent in response.

In the current economic climate – high inflation, cost of living pressures, rising interest rates, mounting rental unaffordability, lack of rental stock – a rent rise may be particularly bad news for tenants. Knowing there may be resistance from tenants, it pays to make sure landlords know the rules about rental increases.

Overview:

Periodic agreements: Rent can only be increased once in a 12-month period. The landlord must give the tenant at least 60 days’ written notice of the increase (this also applies where the tenancy is renewed).

Fixed-term agreements:

Agreements with a fixed-term of less than two years: Rent can only be increased if the agreement sets out the increased amount or how the increase will be calculated. The landlord does not need to give the tenant written notice of the increase.

Agreements with a fixed-term of two years or more: Rent can only be increased once in a 12-month period. The landlord must give the tenant at least 60 days’ written notice of the increase.

No written agreement: Rent cannot be increased during the first six months.

If the tenant thinks the rent increase is excessive, they have the right to negotiate with their landlord/property manager and, if negotiation fails, the tenant can apply to the relevant tribunal or court to determine if the rent increase is fair and equitable. Matters to be considered include:

• whether the rent remains comparable with other properties in the area
• range of market rents usually charged for similar premises
• difference between the proposed and current rent
• term of the tenancy
• period since last rent increase (if any)
• the estimated value of the premises
• the cost of upkeep of the property paid by the landlord
• the cost of services provided by the landlord (or tenant)
• the value of the contents provided by the landlord for the tenant’s use 
• the state of repair and general condition of the property
• any other considerations (e.g. if the landlord is putting up the rent simply to force the tenant out)