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Landlord putting up your rent? Here's what you need to know

Rents have risen dramatically over the past couple of years. Photo: Getty
Rents have risen dramatically over the past couple of years. Photo: Getty (Lourdes Balduque via Getty Images)

At the end of last year, rents hit a record high. According to Rightmove, outside London, the price of newly let property was up 9.7% on average during the year, to £1,172 a month. In the capital the average rent rise was even more painful – up 15.7% in a year to £2,480. And it’s not over yet: the property portal is expecting rents to gain another 5% in the coming year. When your landlord gets in touch with the news of a hike, it can come as a horrible shock, so it’s worth knowing what you can do.

Runaway rents are the result of the fact there are so many renters and not enough properties to go around. The number of people looking for a new rental property is up 53% since 2019. Meanwhile the number of landlords has shrunk. Some have decided to cash in while property prices are higher, some are getting out of the business because rising mortgage rates, punishing tax rules and tougher landlord legislation means higher costs, while others have moved into the short-let market. The number of properties available to rent is down 38% compared to pre-pandemic levels.

It means that if you’re moving properties and are shocked by how expensive everything is, there may be little scope for negotiation. There are an average of six people competing for each home, so if you can’t offer the full rental price, there’s a reasonable chance someone else will.

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If you’re staying put and your rent rises, you rights will depend on your circumstances. If you live in Scotland, you may benefit from the rent freeze, which lasts until March this year, and means that in many cases your landlord isn’t allowed to raise the rent during this period. There are exceptions to this, including cases where they can prove that their costs have risen. However, even where exceptions apply, the rise is limited to 3% of your rent or 50% of those increased costs – whichever is lower. From April, the freeze is lifted and replaced with a cap of 3% – or 6% in exceptional circumstances – which lasts until September.

In England your rights will depend on the kind of tenancy you have. If you’ve signed up to a fixed term – either an assured shorthold or assured tenancy – they can’t increase the rent during that term unless you agree to the rise, sign a new agreement, or have a rental increase clause in your contract. These clauses are more likely when you’ve signed up for more than a year, but it’s worth checking what you agreed to.

Otherwise, if the landlord gets in touch and says the rent is rising during the fixed term, you don’t have to agree to it. If you disagree, don’t pay the extra, or it will automatically become your new rent. If you’re worried, you can contact charities like Citizen’s Advice or Shelter to talk it through.

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Many landlords will wait until your fixed term is near the end, then offer you a replacement agreement with a higher rent. Your tenancy agreement will often set out what happens at the end of the fixed term, so it may be clear that if you don’t sign an agreement, you will need to leave the property.

If the agreement doesn’t say what happens after the fixed term, or says the tenancy continues afterwards, and you don’t sign a replacement agreement, they may well serve you with notice of a rent rise – known as a section 13 notice. This allows them to increase the rent. If you don’t pay this, they can take steps to get you out of the property.

If you can’t afford a higher rent, usually the best place to start is to talk to your landlord and try to agree on a smaller increase. If this is a daunting process, Citizens Advice can help. If you can’t agree, you can go to a tribunal. It will assess a reasonable market rent for the property, and it can award the landlord more than they are asking for, so you need to understand what you’re getting into if you consider this approach. Again charities can help you get to grips with this.

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If you have a contract that rolls from month to month (a periodic tenancy) then they have the right to increase the rent whenever they like. You may be able to negotiate, but if you can’t agree and you don’t pay the higher rent, they can take steps to force you to leave.

If you’re faced with a rent increase, you will need to think carefully how you will afford it. Renters are already horribly squeezed. On average they spend around a third of their income on rent – compared to people with mortgages who spend an average of about a fifth. It means a 10% increase in rent has a profound impact on their lives. The HL Savings & Resilience barometer already shows that tenants tend to be worse off across the board, when it comes to everything from savings to pensions, and this is going to make life even tougher.

In some cases, stringent budgeting will help close the gaps, but some people will find that even with all these cuts, the new rent is too much to manage. If this is the case, you may need to make some difficult decisions about the type and location of property you can afford to live in. This is far easier said than done, because uprooting your life is incredibly unsettling, and the new fees, deposits and moving costs will hit hard at a time when you can least afford it.

If you’re going through this, you don’t need to do it alone. Housing charities and Citizens Advice can offer advice, and can help you explore any support you may be able to get from the state. It’s still an incredibly difficult process, which is one reason why so many people wait until they are missing rent payments before facing it. However, the sooner you work through your options and get the help you need, the easier it will be to tackle.

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