What Is A Fair Rent Increase In The UK?

Fair rent increases are back in the spotlight for 2025. With expectations around the Renters’ Rights Bill including limits on rent hikes and stronger tenant challenge rights, knowing how much and when you can increase rent is pivotal. 

Landlords typically saw annual rent rises of around 3–5%, matching inflation. But with the economic climate changing so fast, being tied to the good old "market rate" isn’t always enough. 

Now more than ever, your tenancy agreement should include information on rent increases as well as when and how you intend to do a rent review. When you are allowed to review the rent and how much you increase it will likely be dependent on the property, tenancy type, and the length of the tenancy. 

This article outlines a few of the central considerations for landlords around rent increase notices, what is a fair rent increase percentage in the UK, and how frequently landlords can implement a rent increase.

Why And When Can A Landlord Increase The Rent?

As a landlord, you will want to keep the rent in line with the current market rates. Charge too much and you’ll put off prospective tenants and have high vacancy rates. But charge too little and you are losing money, this paired with recent regulatory changes could make it incredibly hard to make a profit. For example, Section 24 got rid of mortgage interest as an allowable expense, EPC changes increase landlord overheads, and the upcoming Renters' Rights Bill threatens to squeeze landlords even further.

Landlords can’t increase the rent as much as they want just because costs increase.

Instead, rent increases should keep a property in line with current market rates. Begin the process of doing a comparative market analysis, if other, similar properties in the area are charging £1,000 a month then this is a good guideline for your own property. Additionally, if the average rent increase in the area is 3% then you should keep your rent increase in line with this.

Additionally, landlords can’t raise the rent whenever they want.

When a landlord can raise the rent depends on the type of tenancy.

• For periodic tenancies, ie. a tenancy that’s on a rolling week to week, or month to month basis, landlords can’t generally increase the rent more than once a year.
• For fixed-term tenancies a landlord can only raise the rent once the tenancy period ends (unless otherwise stipulated in the tenancy agreement).

As a general rule, landlords should include a rent increase clause in the tenancy agreement that stipulates when an increase will happen and the notice period that will be given before the rent increase.

If the landlord does not include a rent review clause in the tenancy agreement, or this has expired, the landlord may still be able to raise the rent by using a section 13 notice.

What Is a Fair Rent Increase in 2025?

A “fair” rent increase should strike a balance between staying profitable and not pricing your tenants out. In the UK, there’s no legal definition of what “fair” means, but there are clear guidelines you’ll want to follow. 

In 2025, this is especially important as more local councils and housing organisations scrutinise landlords’ rent-setting practices. With renters having more rights to challenge “unreasonable” increases (particularly under assured tenancies and under the upcoming Renters’ Rights Bill), fairness isn’t just a moral argument but a compliance one.

A fair rent increase should reflect rising costs, improvements to the property, and the current local market, not just arbitrary percentages.

In Manchester’s M14 postcode, for instance, two-bed flats that rented for £950/month in early 2023 are now averaging £1,100 in 2025. If you're still charging £950, a £50–£75 bump could be considered reasonable, especially if you've added value (e.g., double glazing or modern white goods).

Some landlords back their increases with local listings. One user on r/UKLandlords put it plainly:

 “Screenshots from Zoopla shut down 90% of objections.”

Inflation is expected to average around 3.2% in Q4 of 2025 (ONS), and that can guide modest rises. But always consider property condition and local demand. Drastic jumps without justification can be challenged and lost.

How To Increase Rent with a Rent Increase Notice?

There are several ways for a landlord to increase the rent, including:

• Stating an increase of rent when renewing a fixed-term tenancy.
• Agreeing to a rent increase with a tenant. There must be a written record of this agreement that is signed by both parties.
• Use a form called a ‘Landlord’s notice proposing a new rent’ otherwise known as a section 13 rent increase notice which increases the rent after the fixed term has ended.

Section 13 – Notice Of Rent Increase Form

The Housing Act 1988 provides for a Section 13 Notice to be issued by the Landlord to the Tenant in order to increase the rent after the initial fixed period has expired and the tenancy is in the statutory periodic tenancy, it cannot be used to increase the rent during the fixed term of a tenancy.

It’s also important to note that it cannot be used until 12 months after the start of the tenancy and cannot be used to increase the rent more than once every 12 months.

This route is not available in those cases where the Tenancy Agreement already provides stipulated terms for rent increases.

The Section 13 Notice must provide the following details:

• Details of the landlord and/or his agent
• The tenants’ details
• The details of the Property
• The amount of the increased rent and any other increased charges
• The proposed commencement date

For a full breakdown of rent increase laws and the legislation involved, visit gov.uk.

When Can A Landlord Implement A Rent Increase?

1. During a Fixed‑Term Assured Shorthold Tenancy (AST)

• Only if the tenancy agreement contains a valid rent review clause, or the tenant gives written agreement to a new rent increase.
• Otherwise, no rent increase can occur until the fixed term ends.
  

2. Once the Tenancy Becomes Periodic

After the fixed term ends, if the tenancy becomes a rolling periodic tenancy, the landlord can increase rent via a Section 13 notice (Form 4):

• Frequency: Once per 12-month period   .
• Notice periods (minimum):
  • 1 month if rent is paid weekly or monthly
  • 3 months for quarterly payments
  • 6 months for annual payments  .
• The new rent takes effect on the next rent due date, matching the tenancy period.
  

3. Within the First 12 Months

Even in a periodic tenancy, the landlord cannot serve a Section 13 notice until 12 months have passed since the previous rent started  .

What’s Changing Under the Renters’ Rights Bill?

The Renters’ Rights Bill (expected summer 2025) introduces significant reform:

• All tenancies in England will automatically be periodic (no more fixed-term ASTs).
• Rent increases must be via Section 13 only, once per year.
• Landlords must give at least two months’ notice—up from the current 1 month.
• Tenants may challenge increases at the First-tier Property Tribunal if they exceed local market rates.
• Also bans rental bidding, caps increases to market rate, and prevents no-fault evictions.

What Is A Fair Rent Increase Percentage In The UK?

Landlords must keep rent increases fair and realistic—meaning aligned with local market levels. For example, if similar nearby properties charge £500/month, it would be unreasonable to jump straight to £700/month.

Typical Rent Increase Ranges

• Most annual rent increases in the UK fall between 3–5%, roughly tracking inflation or wage growth.
• However, during periods of high inflation or tight rental markets, increases of up to 7% have been observed.
• In many regions, actual annual increases tend to be 2–4%, though hot markets like East Anglia or Northern Ireland may hit 4–5%.

A moderate annual rent increase of 3–5% aligns closely with inflation, helping landlords maintain income without overburdening tenants. These modest adjustments lower the risk of vacancy or tenant turnover. By contrast, steep hikes—say 10% or more—often exceed what tenants can afford, can push rents above local market rates, and increase the likelihood of disputes or tribunal challenges.

How to Determine the Right Increase

1. Research local comparables — check rents on websites or ask local agents.  
2. Base your increase on inflation or wage growth — annual CPI or wage rise rates (e.g. 6–8%) offer a useful benchmark. ()
3. Keep records — keep evidence such as listings or agents’ valuations to support increases in case of challenge.  

Can A Tenant Refuse A Rent Increase?

If a rent increase is particularly large or the tenant believes it is above a fair rent increase, they can refuse an increase in rent and appeal to a tenancy tribunal to challenge a section 13 rent increase. The tenant will be required to continue paying the current rent amount until this decision is made.

For advice for tenants on how to tackle a rent increase dispute, go to the Shelter England’s guide.

If a tenant and landlord cannot reach an agreement on rent, the tenant may decide to move on.

Final Thoughts On Fair Rent Increase in the UK

A rent increase is one of the most common reasons tenants choose to move out—especially if it feels excessive or unjustified. This can lead to longer vacancy periods for landlords and unnecessary stress for tenants. To avoid this, rent increases must be fair, reasonable, and supported by local market data. It’s essential to give tenants proper notice, and be aware that they can challenge the increase through the Residential Property Tribunal if they believe it’s unfair.

Conducting an annual market rent analysis helps ensure your property remains competitively priced. Aiming for an increase of 3–5% annually typically balances economic needs with tenant affordability. In times of high inflation, 5–7% may be acceptable—but only if supported by strong comparables and clear documentation.

Tools like Landlord Studio can simplify this process. Use built-in rent tracking to monitor historical payments and trends, lease expiry reminders to time rent reviews appropriately, and customisable email templates to communicate changes professionally. You can even schedule rent changes in advance to ensure increases take effect smoothly and legally. With the right tools and a fair approach, rent increases don’t have to mean losing great tenants.

Create your free Landlord Studio account today.

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