UK Landlord Forum / Life

Tenants are just over halfway through a 12 month fixed rental contract. I'd like to increase the rent by a small amount as it hasn't been reviewed since they moved in November 2019.

Do they need 6 months notice?

I don't anticipate they will want to move out this November, and was planning on offering them a further 12 months. Can I increase the rent when I offer a new contract (with say 2 months notification of the increased rent) to to them?

Your 'mistake' is keep getting you tenants to sign new fixed term contracts every 12 months. While they are in the fixed term, you can't put up the rent.

At the end of the current fixed term, it would be much more flexible for you and for them to do nothing with the contract which will make it change automatically from an AST to a monthly Statutory Periodic Contract. The contract terms remain the same and no new paperwork need be issued. Period of notice to quit would then be 2 months from you and 1 month from the tenants.


What exactly does your contract say about rent increases? Some include specific clauses, while others do not place any restrictions on when the increase must take place.

If you're not using the s13 process (which is available during periodic rental only), there's no specific notice that's mandatory. It's sensible to discuss it in advance, though.
But increasing the rent during a fixed term is unusual (unless it's written into the tenancy agreement) - it's one of the reasons tenants usually want a fixed term in the first place.

Quote from: HandyMan on July 04, 2023, 01:15:16 PM
Your 'mistake' is keep getting you tenants to sign new fixed term contracts every 12 months. While they are in the fixed term, you can't put up the rent.

At the end of the current fixed term, it would be much more flexible for you and for them to do nothing with the contract which will make it change automatically from an AST to a monthly Statutory Periodic Contract. The contract terms remain the same and no new paperwork need be issued. Period of notice to quit would then be 2 months from you and 1 month from the tenants.


What exactly does your contract say about rent increases? Some include specific clauses, while others do not place any restrictions on when the increase must take place.

I used the model AST from the Gov.UK website, using Option 1.
This is what it says, so I thought when renewing it I would have the opportunity to propose a new rent then.

Guidance Note: The Rent
Tenancies of less than two years: If the landlord and tenant have agreed a
fixed term of less than two years then it is recommended that you fix the rent for
the whole of the term. You should fill in option 1 only.
Tenancies of two or more years: If the landlord and tenant have agreed a
tenancy of two or more years then you need to agree whether the rent will stay
the same for the whole term or whether the landlord can choose to increase it
each year.
If you agree that the rent should stay the same for the whole term then you need
to use option 1. If you agree that the landlord should be able to increase the rent
each year then you need to agree whether this should be by way of a fixed
percentage increase each year - option 2 - or by the annual change in the
consumer price index ("CPI") - option 3. You should only fill in the option that
you have chosen.
Further guidance on each of these options and some worked examples are
attached at the end of this agreement.
Guidance Note: The Rent – Tenant Fees Act
The Tenant Fees Act 2019 prevents landlords or agents from varying the rent
from month to month, except from permanent changes e.g. rent rises that are
agreed by both parties in line with any relevant statutory and contractual
provisions. For example, you cannot ask for a rent of £1,000 in the first month
followed by £800 in subsequent months.
Guidance Note: The Rent – Showing weekly and monthly rent
If you start with the weekly rent, you should express monthly rent as "weekly rent
* 52 / 12"; if you start with the monthly rent, you should express weekly rent as
"monthly rent * 12 / 52".

OPTION 1: Rent fixed for the whole of the fixed term
6.1 The rent is £ per week, which is £ per month (rent
should be shown per week and per month) for the fixed term.

OPTION 2: Option for landlord to increase the rent annually up to an agreed
percentage
6.2 The rent is £ per week, which is £ per month (rent
should be shown per week and per month) for the first year of the fixed term.
6.3 Subject to compliance with the requirements specified in clause B6.4 the
Landlord may increase the rent on each review date by a maximum of [ ] %
(insert agreed percentage).
6.4 The requirements are that the Landlord must serve a rent review notice on the
Tenant not less than 28 days but not more than 90 days before the relevant
review date specifying:
(a) the percentage by which the rent will increase on the relevant review date;
and
(b) the new rent payable from the relevant review date.
6.5 If the Landlord fails to comply with the requirements specified in clause B6.4 the
rent will not change until the next review date.
6.6 In clause B6.3 "review date" means the first anniversary of the start of the
Tenancy and each anniversary of that date.
OPTION 3: Option for landlord to increase the rent annually by reference to the
Consumer Prices Index
6.7 The rent is £ per week, which is £ per month (rent
should be shown per week and per month) for the first year of the fixed term.
6.8 Subject to compliance with the requirements specified in clause B6.9 the
Landlord may increase the rent on each review date by a maximum of the
percentage change in the Consumer Prices Index over the preceding year. This
must be calculated by reference to the last index published before the date on
which the Landlord serves the notice under clause B6.9 and the index published
12 months prior to that.
6.9 The requirements are that the Landlord must serve a rent review notice on the
Tenant not less than 28 days but not more than 90 days before the relevant
review date specifying:
(a) the percentage by which the rent will increase on the relevant review date;
and
(b) the new rent payable from the relevant review date.
6.10 If the Landlord fails to comply with the requirements specified in clause B6.9
rent will continue to be payable from the relevant review date until the next
review date at the rate payable immediately before the relevant review date.
6.11 In clause B6.8 "review date" means the first anniversary of the start of the
Tenancy and each anniversary of that date.

Quote from: Forty45 on July 04, 2023, 12:48:24 PMTenants are just over halfway through a 12 month fixed rental contract. I'd like to increase the rent by a small amount as it hasn't been reviewed since they moved in November 2019.

This is mismanagement.

So, firstly, you only have yourself to blame for however you currently feel about this. But, hopefully, it's not too bad as you've stated that you only want to increase it by a small amount, so you now need to get back on track when the opportunity presents itself (which sounds like it will be when this fixed terms ends) and manage your asset better.

If you are keen on providing a new 12 month fixed term each year, then you need to start including the new rent each time - and the Tenant should slowly, over time, start to expect it as well. If you want to dodge all that hard work, then let your current tenancy's fixed term end and just continue as-is... statutory periodic tenancy... and you can increase the rent, once per year would be normal, without worrying about where they currently are in any fixed term. As for notice period, I'd suggest a couple of months for folk to agree and get their standing order amended... I have never had to serve a Section 13 or rely on any clause in an AST in my life - I do it amicably via email. I doubt I have been simply lucky in this... I have played it well. My increases are regular and modest and backed-up by facts (like marketed rates of similar properties and / or inflation figures). If, for any special reason, I decided not to increase the rent for a few years, I do not then do a jump up. Tenants appreciate honest, transparent dealings and they generally understand the cost of living is going up, for everyone. This year I have notified 6 Tenants of rent increases - ranging from a paltry £15 per month to a heady £25. All were accepted without trouble.

Ask any questions you want for whatever is not clear to you.

Quote from: Forty45 on July 04, 2023, 03:05:40 PMI used the model AST from the Gov.UK website, using Option 1.
This is what it says, so I thought when renewing it I would have the opportunity to propose a new rent then.

Consider renewing a tenancy the same as a new tenancy.
You clearly do have the option to increase the rent - as it says here - but only at the end of the fixed term - and you haven't used that option ever, even though you could have.
Therefore you can't do it in the middle of a fixed term.

You would be better letting this fixed term expire and a SPT arise - is there a reason (your lack of knowledge?, Agent pressure?, Tenant desire?) why repeated fixed term tenancies have arisen?

Quote from: jpkeates on July 04, 2023, 01:16:36 PM
If you're not using the s13 process (which is available during periodic rental only), there's no specific notice that's mandatory. It's sensible to discuss it in advance, though.
But increasing the rent during a fixed term is unusual (unless it's written into the tenancy agreement) - it's one of the reasons tenants usually want a fixed term in the first place.

So in November my options are;

1 - allow it to become a monthly Statutory Periodic Contract and then advise them of the new rent,
2 - offer a new Fixed term contract for 1 year and then give a S13 notice to increase in 6 months time?

No to 2.

It's just a new tenancy - with a new fixed term - and a new rent.

Quote from: Hippogriff on July 04, 2023, 03:11:48 PM

Quote from: Forty45 on July 04, 2023, 03:05:40 PMI used the model AST from the Gov.UK website, using Option 1.
This is what it says, so I thought when renewing it I would have the opportunity to propose a new rent then.

Consider renewing a tenancy the same as a new tenancy.
You clearly do have the option to increase the rent - as it says here - but only at the end of the fixed term - and you haven't used that option ever, even though you could have.
Therefore you can't do it in the middle of a fixed term.

You would be better letting this fixed term expire and a SPT arise - is there a reason (your lack of knowledge?, Agent pressure?, Tenant desire?) why repeated fixed term tenancies have arisen?

The let started with a 1 year through an agency. I intend to take it over, and when I did we were in COVID times. I had already had to accept a reduction in rent as one of the tenants lost his job immediately lockdown started ( that is being repaid). I felt fixed terms offered both sides security. I'm looking to sell the house in the next couple of years, ( tenants know this - they are a young family on low incomes), so not having to redecorate again is preferable/desired.

Quote from: Hippogriff on July 04, 2023, 03:17:47 PM
No to 2.

It's just a new tenancy - with a new fixed term - and a new rent.

👍

You are making very heavy weather of this.It will be November before you know it,so why complicate life by doing it now? Take option 1 as described by Hippogriff above. I also just send a friendly email at least 2 months ahead,saying I hope they agree this is still a good deal,and that if they are going to accept they should alter the standing order for whatever date applies.   

Thanks to all for the advice on how I should handle this.