Challenging a Rent Increase
Rising costs seem to be affecting every part of our day to day lives; whether it is our food shopping or our electricity bills. Climbing interest rates are also leaving homeowners and landlords facing increases in their mortgage payments.
Tenants are experiencing higher rents as demand outstrips the supply of available property to rent. The accumulation of additional regulations, the uncertainty of the Renters Reform Bill, changes in taxation, threat of rent controls and the villifing of landlords by activist groups are all contributing to a reluctance by landlords to remain or enter the Private Rented Sector.
Closely linked is that landlords are exiting the market as they reach retirement age and seek similar returns on their investment elsewhere without the same level of vexation.
Challenging a rent increase
An uplift in monthly outgoings are never going to be welcome and whilst those paying mortgages can do little about this, a tenant facing a rent increase may have the opportunity to raise a challenge.
There are three ways to increase rent; by agreement, by a clause in the tenancy agreement or through the use of a Section 13 notice. This last option can only be used if the previous two do not exist.
Having received a Section 13 notice, if the tenant believes that the increase is not fair then they can appeal to the First Tier (Property) Tribunal. The tribunal will make an assessment based on the evidence in front of them, in particular what would be considered to be the market rent.
Responses to a challenge
It is by no means a foregone conclusion that a challenge by a tenant will be upheld. In a warning to tenants, recent analysis by the i newspaper found that more than a quarter of challenges by tenants, had their rents increased by the tribunal to more than the landlord originally proposed.
In addition, in over a third of challenges the tribunal ruled that rents could be raised from their current level.
Generally the tribunal has the power to determine whether the rent is reflective of the local, market rent. Landlords wanting to increase beyond this will need compelling evidence to convince the tribunal.
Condition of the property will also play an important determining part in the decision. Where a property is dated or suffering from an ongoing repair issue, the fair market rent will be reduced to reflect this, which is why it is important landlords continue to keep on top of maintenance and condition of their properties.
You can read more about the process of increasing a rent in our article posted here in December 2021
Please note the date this article was published as the law or the essence may have changed since it was posted. You should always seek independent legal advice if you are intending to rely on any of the contents. Unless stated otherwise this article only reflects the position for the Private Rented Sector in England and therefore may not apply to other countries within the United Kingdom.
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