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How to increase the Rent and mitigate the rising interest rates problem

By Brad Askew on 07/02/2023 with comments
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Interest Rates are up a lot and heading higher.  Keeping your rent fair and reflective of the market is one thing to stay on top of.

There are three main ways of increasing rent for assured shorthold tenancies:  by agreement, through a rent review clause in the tenancy agreement, and by legal notice. I'll say a few words about each.

Increasing Rent by Agreement

This is the preferred method of increasing the rent and is certain; meaning it can’t be challenged.

It usually means giving your tenant a new fixed-term tenancy agreement or renewal. You can also get the tenant to sign a letter indicating their consent, or if they start paying the increased amount without signing anything it is seen as their agreement- though you cannot just send a letter stating the rent will be going up.

(Our Rent Increase Pack includes  a new AST if you want to create a new fixed term, and it also includes the Notice of Rent Change which a tenant can be invited to sign).

Using a Rent Review Clause

Rent review clauses are becoming more common. However, they must comply with the Unfair Terms in Consumer Contracts Regulations. Specifically, you cannot have a clause that simply states that the landlord can increase the rent to any amount they like; it must refer to an independent figure, such as the retail price index. Clauses such as this that are considered void can lead to hefty fines.

Increasing the Rent by Notice

To increase your rent by notice, you must abide by section 13 of the Housing Act 1988, which states that the only time this can be done is after the end of the fixed-term rent, and only once every 12 months. This is done via a prescribed form that must be filled out with the tenant’s information and gives them one month’s notice of the new rent. If the tenant feels this is too high, they can refer the rent to the Rent Assessment Committee for review within this month. Note however that an application for review is only valid if it is received within this month.

(Our Rent Increase Pack includes a Section 13 Notice amongst other things).


Increasing rent incorrectly can lead to legal problems and hefty fines. Make sure that you are aware of all the regulations and methods available to you, and always stay within the law.

I hope that helps - you can always get legal advice by phone if you need here