Renters across the country are bracing themselves for a blow to their wallets as landlords consider raising rents following a staggering twelve consecutive interest rate hikes since December 2021.
With homeowners already feeling the strain of rising interest rates, renters may now find themselves bearing the brunt of these changes, resulting in higher monthly rental payments.
The Bank of England’s base rate currently stands at 4.5%, a substantial increase driven by twelve consecutive rises since December 2021.
These base rate hikes have a direct impact on most mortgages, except for fixed-rate mortgages. Consequently, if landlords have experienced significant increases in their mortgage payments over the past year, it is highly likely that tenants will face corresponding rent hikes to offset these additional costs.
However, it remains crucial to understand the extent of potential rent increases and what actions can be taken if one is dissatisfied with such adjustments. Allow us to shed light on what you need to know.
Approximately 1.4 million homeowners are currently tied to variable mortgage deals, including trackers that fluctuate with the base rate.
So, how much can landlords increase your rent by?
The answer to this question hinges on the type of tenancy agreement in place.
If you have an assured shorthold or assured tenancy, Citizens Advice explains that landlords can raise your rent based on the average cost of similar properties in your vicinity. This practice, known as the “market rate,” emphasizes the importance of conducting thorough research to determine the prevailing rental prices for comparable properties nearby.
For rolling tenancies, where rent is paid monthly or weekly, landlords are generally not permitted to increase rent more than once a year.
In the case of fixed-term tenancies, landlords can only raise rent mid-contract if you consent to the increase or if it is explicitly stated in your tenancy agreement. If you decline the proposed increase, they can implement it once your fixed term ends, at which point you will need to sign a new contract.
Furthermore, landlords must provide a minimum of one month’s notice for weekly or monthly rent payments. For tenants on yearly tenancies, a notice period of six months is required.
If you happen to live with your landlord, they technically have the authority to increase your rent by any amount at any time if there is no fixed agreement in place.
However, it is essential to note that landlords cannot raise your rent during the fixed term unless you agree to it or your agreement explicitly permits such adjustments.
As renters grapple with the fallout from consecutive interest rate hikes, it is crucial to familiarize oneself with the rights and obligations outlined in the tenancy agreement and explore alternative options to address any concerns regarding rent increases.