Monthly rents in South West London have risen considerably over the past year, and as a landlord you may need or want to put up the rent on your own rental property.
It’s not just anecdotal. The Office for National Statistics (ONS) reports that average monthly rents in Merton increased by 7% between August 2023 and August 2024, reaching £2,357. Meanwhile, Wandsworth rental rates rose by 8.5% over the same period, to £2,357. But what’s the best way to negotiate a rent increase with your tenants?
We know it can be a tricky subject to broach, so we’ve set out the essential details and some tips that may help you. In this article, we explain how to negotiate a rent increase in Clapham, New Malden, Kingston, Ham or Wimbledon.
Increasing the rent when you sign a new tenancy agreement to renew a fixed term tenancy is a good natural point, or if there’s a rent review clause, this will clarify when you can give notice of a rent increase. To negotiate a rent increase on a fixed term tenancy agreement, you must follow the terms it sets out. Once you’ve established when you can give notice, try the following tips for negotiating a rent increase with your tenants.
Rent increases in the UK have to be ‘fair and realistic’ – to ensure this, landlords tend to base rent rises on interest rates, inflation rates, the consumer price index, rising costs of upkeep, and the local rental market. Crucially, the new, increased rent should be close to the rent on similar sized properties in comparable condition in the local area.
Unaffordable rent increases that outstrip wages can lead tenants into rent arrears. You could also risk losing good tenants who pay the rent on time, or losing your competitive edge in the market.
These are the processes landlords can currently use to propose rent increases, depending on the type of tenancy agreement and its terms.
Your increase in rent process will be set out in the rent review clause, if there is one. If so, follow this for guidance on how much the landlord can increase the rent, when, and how you must notify tenants.
Under the Housing Act 1988, landlords can serve tenants a Section 13 using Form 4 on gov.uk when proposing a rent increase on an assured periodic tenancy (AST), or a statutory periodic tenancy begins.
The landlord can send a friendly rent increase letter to the tenants and reach an agreement on the increase. Explain why and when the rent increase will be coming into effect – you can use a rent increase letter template for guidance. Once the new rental amount has been agreed, the landlord and tenants must sign an updated contract that specifies the increased monthly rent.
Yes, tenants can appeal to the first-tier tribunal if they think the rent rise is too steep and you can’t come to an agreement. If you’re a landlord who wants to keep a reliable tenant, you can stay open to negotiations to avoid them leaving.
If (or when) the Labour government’s Renters Rights Bill comes into effect, landlords will only be able to increase the rent once per year. For the time being, how frequently a landlord can increase the rent depends on the type of tenancy.
You can only increase the rent at the end of the tenancy agreement, so you can’t raise it more often than the fixed period’s duration. If you plan on increasing it at each renewal, discuss with your tenants to avoid friction.
As a general rule, you can only increase the rent once a year – you can only raise the rent more often with the tenant’s agreement.
Landlords must be careful to give enough notice, typically 6 months’ notice for a yearly tenancy or 1 month’s notice for a weekly, fortnightly or monthly tenancy. Additionally, the new rent rate must come into effect on the same day that the existing rent is due.
If you would like to discuss how to negotiate a rent increase in South West London, contact Robert Holmes today. With our knowledge of the local rental market, we’re happy to help landlords in Wimbledon Village, Wimbledon Chase, South Wimbledon, Roehampton, Putney and beyond with any questions you may have.
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