Rent Increases Under a New Framework
With the abolition of fixed-term tenancies under the Renters' Rights Act 2025, all residential tenancies in England are now periodic. This fundamental change has significant implications for how rents can be increased. The old practice of negotiating a rent increase as part of a fixed-term renewal is no longer possible. Instead, all rent increases must follow the statutory Section 13 process, which imposes specific requirements on timing, notice, and tenant challenge rights.
For letting agents, understanding and correctly applying the Section 13 procedure is essential. Errors in the process can invalidate a rent increase entirely, leaving landlords unable to adjust rents for months while the process is repeated. Getting it right first time matters.
The Section 13 Process Explained
Section 13 of the Housing Act 1988 provides the mechanism for landlords to propose a rent increase in a periodic tenancy. The process requires the landlord to serve a formal notice on the tenant using the prescribed form, currently Form 4. The notice must specify the new rent amount and the date from which the increase will take effect.
The Renters' Rights Act modifies Section 13 in several important ways. The minimum notice period is now two months, giving tenants adequate time to consider the increase and decide whether to challenge it. Rent increase clauses written into tenancy agreements are no longer valid as a mechanism for imposing increases. Every increase, without exception, must follow the formal Section 13 notice procedure.
The 12-Month Cooldown Period
Under the reformed rules, rent can only be increased once every twelve months. The clock starts from either the beginning of the tenancy or the date of the last rent increase, whichever is more recent. This prevents landlords from making frequent small increases or using the threat of repeated increases as a pressure tactic.
For letting agents managing rent reviews across a portfolio, tracking the cooldown period for each tenancy is a critical operational task. Serving a Section 13 notice before the twelve-month period has elapsed renders the notice invalid. The landlord must then wait and re-serve, potentially losing months of the intended increase.
LettingGuru's tenancy management system tracks rent review dates automatically and alerts agents when a property becomes eligible for a rent increase, preventing premature notices and ensuring the correct timing.
The Market Rent Standard
The Renters' Rights Act requires that any proposed rent increase reflects the market rent for the property in its current condition. This is a significant constraint. Landlords cannot use rent increases to recoup the cost of improvements, to penalise tenants they wish to remove, or to impose above-market rents in the hope of forcing a tenant to leave.
In practice, this means the proposed new rent should be supported by evidence of comparable rents for similar properties in the same area. Letting agents are well placed to provide this evidence through their market knowledge and access to listing data. Documenting the market rent justification at the time of the notice strengthens the landlord's position if the increase is challenged at tribunal.
Tenant Right to Challenge at Tribunal
When a tenant receives a Section 13 notice, they have the right to refer the proposed increase to the First-tier Tribunal (Property Chamber). The tribunal will assess whether the proposed rent is at or below the market rate for the property. If the tribunal determines that the proposed rent exceeds the market rate, it will set the rent at what it considers to be the market level.
A critical change under the new rules is that the tribunal can no longer set a rent higher than the amount proposed in the Section 13 notice. Previously, there was a risk that a tribunal referral could result in a higher rent than the landlord originally proposed, which deterred tenants from challenging increases. This risk has been removed, meaning more tenants may feel confident referring increases to the tribunal.
For letting agents, this means that every proposed rent increase should be defensible. If you cannot demonstrate that the proposed figure reflects genuine market rent, the increase is likely to be reduced at tribunal. The costs of a tribunal hearing, in terms of time, preparation, and potential professional embarrassment, make it worth getting the figure right from the start.
Practical Steps for Rent Reviews
A well-managed rent review process should follow these steps:
- Check eligibility: Confirm that twelve months have elapsed since the tenancy start date or the last rent increase.
- Research market rent: Gather evidence of comparable rents for similar properties in the area. Use current listing data, recent lets, and local market knowledge.
- Discuss with the landlord: Agree the proposed new rent, ensuring it is supported by the market evidence and reflects the property's current condition.
- Serve a valid Section 13 notice: Use the prescribed form, specify the correct new rent amount and effective date, and ensure the two-month minimum notice period is observed.
- Record everything: Store a copy of the notice, the market evidence, and any communication with the tenant against the tenancy record.
- Monitor for tribunal referral: If the tenant refers the increase to the tribunal, prepare the market evidence file and consider whether to attend or submit written representations.
Common Mistakes to Avoid
The most frequent errors in the Section 13 process include serving the notice before the twelve-month period has elapsed, using the wrong prescribed form, specifying an effective date that does not allow for the full two-month notice period, and proposing a rent that cannot be supported by market evidence. Any of these errors can invalidate the notice and require the entire process to be restarted.
Another common mistake is relying on rent increase clauses in the tenancy agreement rather than following the formal Section 13 process. Under the Renters' Rights Act, these clauses are no longer a valid mechanism. The statutory process must be followed regardless of what the tenancy agreement says.
Managing Rent Reviews at Scale
For agencies managing dozens or hundreds of tenancies, keeping track of rent review eligibility dates, market evidence, notice deadlines, and tenant responses is a significant administrative task. Manual tracking using spreadsheets or calendar reminders is prone to error, especially as the volume grows.
LettingGuru automates the rent review workflow by tracking eligibility dates, generating reminders, and storing all associated documentation against each tenancy. Your team can see at a glance which properties are due for review, what the current and proposed rents are, and whether any tribunal challenges are pending. Book a free demo to see how LettingGuru streamlines rent reviews and keeps your agency compliant with the latest Section 13 rules.