Understanding Rent Increases in the Private Rented Sector

Navigating rent increases in the private rented sector can be challenging for both Landlords and Tenants. With rising housing costs and changing market conditions, it's essential to understand the legal process and best practice when dealing with rent.

In England, rent increases in the private rented sector are governed by several pieces of legislation, most notably:

• Housing Act 1988

• Tenant Fees Act 2019

• Consumer Rights Act 2015

Any proposed rent increase must be lawful, fair, and clearly set out in the tenancy agreement.

During a Fixed-Term Tenancy

Rent cannot be increased unilaterally during a fixed-term tenancy unless the tenancy agreement contains a specific rent review clause. This clause must be transparent, reasonable, and enforceable. If no such clause exists, the rent can only be increased by mutual written agreement between the Landlord and Tenant.

It's important to note that a Landlord cannot use a Section 13 notice to raise rent during a fixed term unless the tenancy has converted to a statutory periodic tenancy.

Periodic Tenancies and Section 13 Notices

Once a tenancy becomes periodic the Landlord can propose a rent increase by serving a Section 13 Notice (Form 4) and must provide the Tenant with at least one month’s notice.

Tenants have the right to challenge a proposed rent increase by referring the matter to the First-tier Tribunal (Property Chamber). The Tribunal will then determine what constitutes a fair market rent. Please note, that this process will change once the Renters’ Rights Bill becomes law.

New Tenancy Agreement with Revised Rent

An alternative approach is for the Landlord to issue a new fixed-term tenancy agreement with revised rent terms when the current one ends. This allows both parties to reconsider and renegotiate all terms—not just the rent—before entering into a new agreement.

Fairness, Transparency, and Limitations

Rent increases must be reasonable and proportionate. Frequent or excessive rent hikes could fall foul of the Consumer Protection from Unfair Trading Regulations 2008, especially if they result in pressure on Tenants .

Whether a Landlord considering a rent increase or a Tenant responding to one, understanding the legal process is essential. Ensuring transparency, fairness, and compliance not only helps maintain positive relationships but also avoids legal complications.

The statistics below provide an overview of the level of rent increases since January 2025.*

Average UK monthly private rents increased by 7.7%, to £1,332, in the 12 months to March 2025 (provisional estimate); this annual growth rate is down from 8.1% in the 12 months to February 2025.

• Average rents increased to £1,386 (7.8%) in England, £792 (8.9%) in Wales, and £1,001 (5.7%) in Scotland, in the 12 months to March 2025.

• In Northern Ireland, average rents increased to £838 (8.2%) in the 12 months to January 2025.

• In England, private rents annual inflation was highest in the North East (9.4%) and lowest in Yorkshire and The Humber (4.6%), in the 12 months to March 2025.

• Average UK house prices increased by 5.4%, to £268,000, in the 12 months to February 2025 (provisional estimate); this annual growth rate is up from 4.8% in the 12 months to January 2025.

• Average house prices increased to £292,000 (5.3%) in England, £207,000 (4.1%) in Wales, and £186,000 (5.7%) in Scotland, in the 12 months to February 2025.

* Private rent and house prices, UK: April 2025 - The Price Index of Private Rents (PIPR) measures private rent inflation for new and existing tenancies. The UK House Price Index measures house price inflation. Office of National Statistics