What Should a Fair Rent Increase Be in East London?  

Costs have risen for landlords in recent years, and you may have seen properties like yours putting up the monthly rent to match. But what is a fair rent increase in Stratford, Barking, Newbury Park or Gants Hill these days?  

In the UK, rent increases have to be fair and reasonable, so it’s important to follow the guidance. You don’t want to attract a legal dispute or make your property’s rent unaffordable. After all, Londoners already spend an average of 40% of their income on their monthly rent. 

Read on as we explain how to decide on a fair rent increase that ticks all the boxes. 

What is considered a fair rent increase?  

London rents have risen steeply in recent years, but what is fair percentage rent increase in the UK? A fair rent increase is typically around 4%, but this varies in practice.  

How much can a landlord raise the rent in east London?  

Broadly speaking, it should be in line with inflation and the market rate for similar properties in the local area, and excessively large increases should be avoided.  

If in doubt, consult a trusted estate agent who knows the east London rental market. You should also bear in mind that rent increases which exceed wage inflation may push your tenants into arrears. Where there’s a secure tenancy or regulated tenancy, any rent rises must be set by a rent officer. 

Can your tenant refuse a rent increase?  

Yes, you need the tenant’s agreement to raise the rent and tenants are allowed to refuse a rent increase if it’s too steep or above the property’s market value. If the matter isn’t resolved amicably, they can challenge it in a First-Tier Tribunal. If this happens, you will have to demonstrate that it’s a fair rent increase – which is why it’s important to base your calculations on the local market. 

Want to know more? Rent increases sit within a broader picture of rising costs and a shifting regulatory landscape — read our guide to average rent increases in London and find out what preparing for the Renters’ Rights Bill means for how you communicate rent changes to tenants.

When & why is it a good idea to raise the rent?  

It’s reasonable for landlords to raise the rent to reflect upgrades to the property, or to cover rising landlord costs such as insurance premiums or repairs.  

You can generally only raise the rent once per year for periodic tenancies, or at the end of a fixed-term tenancy. To avoid the need for a large rent increase, which can panic tenants and may give them cause to raise a dispute, assess local market rents every year.  

Notice period for a rent increase  

If you have to raise a Section 13 notice to raise the rent, the notice period depends on the type of contract. Landlords have to give a minimum of one month’s notice for a weekly or monthly rolling rental period, and typically 6 months’ notice for rental periods over one month. Understanding the rights of landlords and tenants is crucial when you want to set a rent increase.   

When are you allowed to increase the rent?  

Understanding the rights of landlords and tenants is crucial when you want to set a rent increase. The rules depend on the type of tenancy or tenancy agreement terms, which usually govern when the landlord can increase the rent. 

1. Fixed term   

You can only set a rent increase on a fixed-term tenancy if the tenant will agree to it, or after the fixed term ends. Landlords can give advance notice that the rent will increase when the contract is renewed at the end of the fixed term. This applies to most assured shorthold tenancies, unless there is a rent review clause included in the contract. 

2. Periodic tenancies    

Landlords can only increase the rent once a year on a periodic tenancy, or rolling contract. If it was always a periodic tenancy (and did not start as a fixed-term tenancy agreement), you can’t issue a Section 13 notice within the first 12 months. 

3. Rent review clauses  

Landlords can include rent review clauses in the tenancy agreement to state when an increase can take place, the notice period that will be given and how much the rent will increase by. A rent review clause usually includes the formula that will be used to calculate the increase. 

How to talk to your tenant about the increase  

You can issue a landlord’s notice proposing a new rent to let tenants know about the rent increase, or serve a Section 13 notice. Try to maintain a good relationship with your tenants, and document your correspondence. 

Want to find out more? If a rent rise leads to tension with your tenant, it helps to understand your options — explore what to do if your tenant stops paying rent and how tenancy deposit disputes are resolved.

Find out more 

Charging enough rent without causing unexpected consequences can be a balancing act, but knowing the rules can make the process smoother. If you have questions about deciding on a fair rent increase for your rental property in Forest Gate, East Ham, Goodmayes, Seven Kings or the surrounding areas, speak to us.