Here is a question to the blog clinic from Leslie who is a tenant
Been renting my property for 6-7 years never defaulted.
I have had an email saying my rent is to be increased from £900 to £1200 as of two months’ time. The letting agent wants me now to provide my financial status within one week if I do not provide he is going to serve me notice to vacate the property.
Why all at a sudden does he need this as he never asked last time when increased and what can I do about this 33% raise.
A landlord cannot simply increase the rent because they want to. They can only increase the rent in accordance with the rules.
There are three ways that rent can be increased:
- By agreement between the parties
- Under a ‘rent review’ clause in your tenancy agreement (ie a clause which authorises the landlord to increase the rent and sets out a procedure for doing this), or
- By the statutory notice procedure – as per section 13 of the Housing Act 1988.
The statutory notice procedure by the way only applies to assured or assured shorthold tenancies but I assume your tenancy is an AST.
Check your tenancy agreement
So the first thing to do is to check your tenancy agreement. If there is no rent review clause, then your landlord cannot increase the rent during your tenancy fixed term.
Even if there is a rent review clause, this will only be effective if it is ‘fair’ under the unfair terms rules.
If your tenancy is periodic
If your tenancy fixed term has ended and has not been renewed, you will have a periodic tenancy.
Landlords have the right to increase the rent during a periodic tenancy under the statutory notice procedure. The proper form of notice must be used (form 4) and the form must be completed properly.
Once the notice has been served the tenant has a one month period to appeal the increase, if they consider it is above the market rent, to the First-Tier Tribunal. If this is not done the proposed rent will take effect.
Rent increases generally
Before bringing any challenge to a proposed rent increase, you should first check what the rental values are in your area for similar properties.
For example, you may have been paying less than the market rent for a few years and the proposed increase may merely reflect this. Often landlords don’t increase rent up to the market value during a long tenancy and over several years the rent may end up being considerably undervalued.
This tendency has been exacerbated by the pandemic when few landlords increased rent (and many landlords actually agreed to reduce the rent to help tennats). So the agents may just be wanting to regularise the situation.
Are you obliged to provide financial information?
Strictly speaking, no. You cannot be forced to do this.
However, it sounds as if the agents want to ensure that any rent increase is something you can afford. So it may be best to co-operate with them.
It is probably your best chance to get the increase amount reduced.
Can the landlord serve a valid section 21 notice?
I assume that the notice referred to is a section 21 notice. It is worth checking however whether the landlord is entitled to do this as there are a number of prerequisites he must comply with. So check the Government guidance found here.
For example, there are notices your landlord must have served on you at the start and in the duration of the tenancy, such as deposit information and gas safety certificates. If this has not been done properly, the landlord cannot serve a valid notice or evict you under section 21.
However, if the landlord is compliant, then yes, ultimately he can evict you under the section 21 process. Whether he will actually want to do this is another matter.
It sounds to me as if the landlord and his agent have decided that your rent is too low in comparison with what it would get if the property were being let now, and want to bring the rent up to the market rent.
After all the property is being rented out by the landlord as an investment, so this is not unreasonable.
However, the fact that the agents want to have a conversation with you about your finances, looks as if the landlord would prefer to keep you and so is willing to keep any rent increase to a level that you can afford, so as to keep you as a tenant.
If you are a good tenant I doubt whether the landlord will want you to go. He certainly will not want to go through all the hassle of evicting you and dealing with voids after you have gone, and then finding a new tenant who may turn out to be unsatisfactory (although the agent may view this as a good opportunity to earn a higher commission).
So you are probably in a good position to negotiate a reasonable rent increase.
NB For more help and guidance for tenants see the Renters Guide.