What is an Average Rent Increase in East London?

With upcoming changes to rent increase rules on the horizon with the Renter’s Rights Bill, private landlords need to get up to speed with the correct processes and how to calculate fair rent amounts. Managing rent increases properly will help to ensure you achieve the optimal rental yield while also staying on the right side of the law.

Fair and realistic rents should be in line with the local rental market, so if you have property in Leytonstone, Seven Kings or Barking, you will need to align rent to the area your property is in. This article covers the current and proposed rules around rent increases, an overview of average increase in London and also answers the common questions on this topic.

What Is An Average Rent Increase In London?

Over the last year, average rent in London increased by 4.2%, which is a significant drop compared to a 14.8% growth a year earlier (according to Zoopla).

The UK on whole saw rent increases of 3%, with rents inflation at the slowest rate of growth since 2021. The slowdown in rents inflation is mostly attributed to reaching a rents’ ceiling, with tenant affordability pressures due to the cost of living growth.

These figures apply to the full rental sector but the private rental sector showed higher average rent growth. A report from the Office of National Statistics revealed that private rents in London increased by an average of 11.5%, with the UK average increasing by 9.2%.

ONS also revealed that average rent was highest in London (£2,206) and lowest in the north east (£700). Experts are predicting average rent rises of 3-5% in 2025 for private rental properties in London.

By area, central London areas have the highest rents of over £2,150, while east London areas including Ilford and Barking are lower, in the £1,700 to £2,150 range.

Can A Landlord Increase Rent In 2025?

Yes, landlords can increase rent in 2025 as long as there is not a fixed term in place and there has not been an increase in the last year. With growing mortgage rates and other costs rising, increases may be necessary to cover the additional costs that landlords are experiencing.

However, it is important that all the correct rules are followed. Rent increases should be reasonable and not be discriminatory against tenants. The rent increase should reflect the local rental prices for similar properties in the area and the upcoming Renter’s Rights Bill includes rules to strengthen the adherence to this.

How Much Can Landlord Increase Rent?

While there currently isn’t a limit on the amount a landlord can increase rent, any increase should be fair and realistic. You should review the average rents in the same area and ensure that any increase will not take the monthly rent out of proportion with the local market.

Landlords should also consider whether it is worth hiking rent up and potentially losing good tenants if they can no longer afford the rent at an increased rate. Most landlords take wage inflation into account, so currently a fair rent increase in relation to inflation would be around 5%.

It is also possible for the tenant to challenge unreasonable rent increases at tribunal, so it is best to align the new rent with standard increases across the local property market.

How Often Can A Landlord Increase The Rent?

For periodic tenancies, landlords can increase the rent once a year as a maximum. With fixed term tenancies, there must be a clause in the tenancy agreement that allows rent increases, or a rent increase can only be applied when the fixed term comes to an end.

Tenants can challenge rent increases if they believe them to be unfair through a tribunal.

How Much Notice For A Rent Increase?

The notice required depends on how the tenant pays their rent. For monthly rent, landlords must provide at least one month’s notice. For tenants who pay their rent annually, six months’ notice must be provided.

How To Increase The Rent As A Landlord

Landlords should contact tenants to advise them that they want to increase the rent using a Form 4 Notice (Section 13). If the tenant agrees to the rent increase, you should put the agreement in writing to have an official record that both the landlord and tenant sign.

If there is a fixed term tenancy in place, the landlord must follow the steps detailed in the tenancy agreement to notify the tenant and proceed with the rent increase.

Should the tenant disagree that the rent increase is fair, they can challenge the increase in a First-tier tribunal and the courts will decide whether the rent increase can be applied.

The Future Of Rent Increases In London

The Renter’s Rights Bill aims to make it easier for tenants to challenge what they deem to be unfair rent increases. There will be stricter rules around aligning with market rent rates and landlords will no longer be able to include clauses in contracts to raise rent.

The bill is expected to pass into law by the summer of 2025, so landlords should be well prepared for the changes and ensure that they are following the new legislation concerning any rent increases in future.

If you have a rental home in East Ham, Stratford or Forest Gate and are worried about navigating the rules around rent increases, we can help. As an established lettings agent in east London, we can help with managing properties and reviewing the local rents market to comply with the new legislation.

Contact our team to find out more about our services.