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May 1, 2023

How much can landlords increase the rent?

With the cost-of-living crisis engulfing the UK, tenants and landlords alike are struggling with costs and the justification for increases.

By Silvia Pellegrino

While there isn’t a limit to how much a landlord can increase one’s rent, it is important for the contract’s terms and conditions to mention a cap. This is because the tenancy agreement must include the criteria that a rent renewal should respect, as Gov UK explains.

Generally, there are two main types of rent:

  • Periodic tenancy rolls on a week-by-week or month-by-month basis
  • Fixed-term tenancy runs for a set period of time

In the first case, the landlord cannot increase the rent more than once a year without getting the tenant’s signed agreement first. In the second case, on the other hand, the landlord can only increase the rent upon mutual misunderstanding and, if the tenant does not agree, the rent can only be increased once the fixed contractual term comes to an end.

Tenant stressing out over rent calculations on a table with a calculator and contracts
The UK is facing a true rental crisis. Image: fizkes / Shutterstock

There might be an instance where the landlord might still choose to raise the rent as they see fit, however, it still needs to be within reason, meaning that it has to reflect local average prices.

For instance, if the tenant is currently paying £1,500 a month but similar properties in the area are at a market rate of £1,700, the landlord could ask for the extra difference. However, if the increase goes beyond the local average, the tenant can challenge the request. 

Apart from the instances mentioned above, the landlord and the tenant can agree on a rent increase signed on a new contract, or use a ‘landlord’s notice proposing a new rent’ form, which increases the rent once the term ended.

Nevertheless, for any kind of increase, the landlord is obliged to give at least one full month’s notice in the case of a periodic tenancy and six months in the case of a fixed-term-one-year tenancy.

[Read more: London landlords rush to sell before the property bubble bursts]

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Which cities in the UK have the highest rent increase?

According to Zoopla’s UK Rental Market Report 2022, there has been a 12.3% rental price growth this year in the UK. Average rents have risen by £115 a month over the past year, reaching £1,051. 

In particular, a new Hamptons report shows that London has had a rental price growth of 17.2% in 2023, which is motivating more and more renters to look for smaller homes every day. However, this is not made easy by the current undersupply of rental homes, which shows no sign of changing anytime soon. This means that rents will continue to rise beyond average growth rates into 2023, despite the UK’s cost-of-living crisis.

These are the five cities with the highest rents as of today, according to Zoopla.

1. London 

The capital has seen rental price growth of 17.8% a year, bringing up its average rent prices to a substantial £1,818 a month. 

Current figures show rents rebounding off a low base, after a 10% fall during the 2020 lockdown. In fact, average rents in London are now 17.8% after a double-digit decline over the pandemic. 

2. Cambridge

The city, known for its culture and university life, stands in second place for the highest rents. 

Even if Cambridge had lower growth in 2022 – 8.8% – its rent prices are still very high, reaching up to £1,368.

3. Bristol

Bristol, located on the River Avon, comes in third place for both the highest rent prices and the highest rental growth rate. 

The city has an average rent price of around £1,209 per month, while it has gone through a 12.9% growth in rental prices since January 2022.

4. Edinburgh

While fellow Scottish city Kilmarnock is currently the cheapest place to rent in the UK with rent averaging around £444 per month, Edinburgh has the fourth highest rent prices. 

Scotland’s capital averages a monthly rent of £1,021, which is the result of a 12.3% annual growth in the prices of rental properties.

5. Southampton

In fifth place is Southampton, which abandons the four-figure monthly rent prices, but still remains one of the highest in the UK.

With a 9.7% annual growth in rent, the city has a monthly average of £957.

[Read more: Young and low-income private renters have 20% less space than 20 years ago]

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