This blog has looked before at the pros and cons of renting – the freedom and flexibility it offers versus the stability and (eventual) savings that owning your own home brings. One obvious downside however is the inherent instability of living in property owned by someone else. Even if you are fairly certain they won’t ask you to leave the property, many renters worry about whether the landlord will increase their rent.
But can your landlord really increase your rent whenever they like? In short, no. Luckily, there are some rules that serve to protect tenants from property owners increasing the rent on a whim.
Fixed Term Contracts
In most cases, when you sign an agreement on a house, you agree to a fixed term contract. This protects both the landlord and the tenant; landlords are secure in the knowledge that they have the rental income for the fixed period of time, and you have the guarantee that you have the property until the end of the contract at a minimum. Crucially, a landlord can’t change the rent before a fixed term contract ends.
A typical period for a fixed term arrangement is 6 months, although this is negotiable at the start of the tenancy and you should always read the small print. But whatever the length of the fixed term contract, you can be safe in the knowledge that your rent cannot be increased without your consent during this period.
Rolling Contracts
Once your fixed term contract ends most agreements will automatically move on to a ‘rolling contract’. Now you can give a month’s notice on your tenancy if you decide to move on, and your landlord can also give you notice. It’s a more flexible arrangement for both parties. However, it does mean that your landlord can now increase the rent.
The first opportunity for them to do this is at the time when your fixed term contract ends. Don’t worry too much though – they still need to give you a month’s notice before any proposed rent increase.
It’s Not Fair – Is it?
A landlord can’t just put up the rent by however much they like. The amount by which your rent increases must be ‘fair and reasonable’ and in line with market rates. For an idea of what these are, look around other, similar rental properties in your area.
If you do feel the amount by which your landlord is proposing to put up the rent is unfair, then you do have the right to challenge. In England you should seek a ‘first tier tribunal’ , a process carried out by the Property Chamber to decide whether the rent increase is fair or not. In Wales the process is slightly different and you are required to fill out a Fair Rent Review Form. In Scotland, the process entails appealing directly to the Housing and Property Chamber.
A landlord can also only increase the rent once per year. So if you are planning to stay in a property long term and you can absorb the rent increase, at least you know that you won’t have to do so again for at least another year.
Making Rent Work For You
However fair you feel the rent you pay might be, it can be hard feeling like every monthly payment is paying off someone else’s mortgage. Until recently, there has been no financial upside to paying rent. Now though, with Credit Builder you can make the rent you pay work for you. Sign up to the Credit Builder platform and every rental payment you make on time will go towards improving your credit rating. A better credit rating has numerous benefits – from better deals on things like phone contracts and insurance premiums to a higher chance of being accepted for a mortgage. It’s simple to sign up, and completely free. You also get to keep a close eye on how your credit score is improving via the Credit Builder app.