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Question Title: Rent increases
| Question: 405 |
| We have tenants where their fixed term ends in October and they have advised us that they wish to renew for a further period. In their original agreement there is a clause that states that the rent will increase after a year in line with the Retail Price Index (RPI) up to a maximum of 5%. We have suggested to the landlord that the rent rise by £25.00 but the landlord wants to increase it by £50.00 per month. Can he do this? Also the same landlord is asking if the rent can rise in line with interest rates?
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| The Retail Price Index is currently 2.3% which would therefore be the maximum by which the rent could be increased under this tenancy - due to the rent increase clause that has been included in the original tenancy agreement. If the amount of the increase using this RPI is £25.00 or less then the rent increase that you are proposing would be acceptable. The same criteria would apply to the landlord's suggestion. The rent increase cannot be more than 2.3%. Further the landlord cannot use the section 13 rent increase route as the tenancy specifies the mechanism for determining rent increases. It would be possible to have a clause where rent increases are determined either by Bank of England interest rates or some other similar formula. The clause would need to be specific in the agreement so that the tenant can know when they sign the tenancy agreement what the level of future rent increases will be.
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References:
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Pages:
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Hyperlinks:
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Letting Handbook |
Chapter 10 |
letting-handbook-and-factsheets.html
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Letting Factsheet No 13 |
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factsheet-13
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For more information, discuss on the Forum
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