Rent increase what is fair

In the past, rent officers and the First-tier Tribunal Property Chamber used recent registered rents of other similar properties as evidence of what the fair rent for a particular property should be; these were known as comparables. However, following the deregulation of the private rented sector landlords argued successfully that market rents for assured shorthold tenancies should be used as comparables, particularly as these became more widespread.

This has had the effect of increasing fair rents. Evidence of market rents can be found by looking at advertisements for similar rented property in local newspapers, advertisements in shop windows etc. The approach of using market rents as comparables has become progressively more established by case law. Arguments about scarcity are an important factor for the tenant in restricting the level of a fair rent increase.

Scarcity value was included in the determination of a fair rent to protect tenants from the high rents, which result from the fact that the demand for rented housing far outstrips supply, ie because of the scarcity of rented accommodation. Fair rents must be assessed on the level they would have been if there was no scarcity, thereby keeping the rent low. To contest this presumption, a landlord would have to show there was no scarcity in the broader locality. Landlords can refer to a fairly large locality when presenting evidence of scarcity.

Advisers should gather information about the pressure on housing in the locality, as case law has established that scarcity in an area could be shown by demand as well as supply. The First-tier Tribunal Property Chamber can use council housing registers and housing association waiting lists when assessing scarcity because a high demand for public sector housing may reflect pronounced scarcity in the private sector. Relevant evidence should be available from local registered social landlords and local authority housing registers; from housing advice centres regarding the level of housing need and from local homeless persons units about the number of people applying for housing considered not in priority need.

Case law has also held that rather than introducing inflexible rules as to the burden of proof of scarcity, the Tribunal's own knowledge and experience of the locality is considered to be of particular value. However, where the committee's determination of a fair rent differs significantly from the market rent indicated by comparables, the committee must show good reason for its decision, providing arithmetical workings if necessary.

Apart from considering comparables and scarcity, advisers should take account of other factors when preparing a submission to a rent officer or to the Tribunal concerning a fair rent, including the following:. Furniture — furniture provided by the landlord should be included in the rent on the basis of the value to the tenant and not the cost to the landlord. There are different ways of valuing furniture.

A rent officer or the Tribunal may either look at the property as a whole including furniture and set a rent for a furnished dwelling, or may consider a rent for an unfurnished dwelling then add an amount for the furniture.

Service charges — an amount attributable to service charges will be included in the fair rent set and landlords who provide services normally give details of their service charge expenditure to rent officers and the Tribunal.

Advisers should check with their clients whether the stated services conform with the terms of the tenancy agreement, whether the standard of the services is satisfactory and the reasonableness of the landlord's charges. Julia Benham. Even if I have good tenants, I will still put the rent up on an annual basis because otherwise I am faced with larger rental increases a few years down the line which will be a big increase rather than small yearly increments.

Also, as a property investor, I view my BTLs as an investment which needs to be growing each year in line with inflation etc. With regards to notifying my tenants of the rent increase, I send them an email or letter two months before their contract ends, asking if they wish to stay for another year, whilst letting them know what the new rent will be. I also send out their new contract with the increased rent added. The first thing you should have done is thoroughly researched your area so that you'd know how much rent to charge in the first place.

Daniela Provvedi. The percentage could be the rate of inflation or perhaps 1 or 2 percent more If the rent you're charging falls into the right bracket for your area and you have great tenants who take care of your property as if it's their own, then I would strongly suggest you don't increase the rent for a couple of years.

You'd send them an email or letter giving them 1 month's notice and refer them to the paragraph in the Tenancy Agreement. I always check Rightmove on a daily basis to constantly monitor the rental market in my area. We increase the rent only when rental values have risen consistently higher than the rent we have set. We then consider how long it has been since we increased the rent previously. We would rather have a good tenant than risk them moving out due to a rent increase.

We notify the tenants via an informal email with the section 13 form attached. You may also be able to apply to a tribunal. This page has been updated following the coronavirus outbreak. You may be able to refuse a rent increase without having to formally challenge it.

It depends on how your landlord tries to increase the rent. If your landlord asks you to pay a new higher rent, then it will be up to you whether to agree unless they:. Some landlords choose to evict tenants who challenge a rent increase.

You can try and negotiate. Negotiation is normally the only way to challenge a rent increase if your landlord has used a rent review clause. The tribunal is usually made up of 2 or 3 people. The tribunal chairperson is normally a lawyer or surveyor.

Your landlord might take steps to evict you if you apply to a tribunal. Check if the proposed rent is in line with similar rented properties in your area. There's a risk that a tribunal could set a higher rent than what your landlord is asking for.

You can check previous tribunal decisions on GOV. Type 'assured shorthold tenancy' into the search box on the page to find decisions that relate to your type of tenancy.

You can only apply to a tribunal if your landlord gives you a section 13 notice. Rent increases Your tenancy agreement should include how and when the rent will be reviewed. Print entire guide. Related content House in multiple occupation licence Solve a residential property dispute Private renting for tenants: evictions Private renting for tenants: tenancy agreements Rent a room in your home Tenancy deposit protection.

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