With the Renters’ Rights Act coming into effect, now is an important time to revisit a very common question from both landlords and tenants… How much can a landlord increase rent by?
No tenant looks forward to hearing about an upcoming rent increase. However, due to inflation and other economic factors, rent increases are often necessary to cover running costs and maintain the profit margins that make buy-to-lets worth the time and money.
Summary
- Before the Renters’ Rights Act, landlords in England could increase the rent once per year in a periodic tenancy using Section 13, with one month’s notice.
- There was no legal limit on the amount, though tribunals could challenge significantly high rent rises.
- Under the Renters’ Rights Act, from 1st May 2026, rent can still only rise once per year but landlords must give two months’ notice.
- Rent increases must align with ‘market rates’ and tenants can challenge these at a property tribunal.
- To determine ‘market rate’ increases factors can include but are not limited to: local rent comparisons, inflation, wage growth, mortgage rate trends, supply and demand, property condition, location and landlord operating costs.
How often can a landlord increase rent?
After one tenant leaves, when a landlord or their agent begins marketing the property to find a new tenant, they can increase the asking rental price without limit. Naturally, if they set the price too high, demand will be low.
During a tenancy, landlords in England can increase the rent once per year in a periodic, rolling monthly or weekly tenancy agreement.
They do this using a Section 13 notice, a legal document notifying tenants about a rent increase, under the Housing Act 1988.
Before the government passed the Renters’ Rights Act legislation on 27 October 2025, this Section 13 was also called a Form 4 notice.
Pre-Renters’ Rights Act, landlords could not increase rent during a fixed-term tenancy (6-12 months usually, but sometimes lasting more than one year) unless the contract had a ‘rent review’ clause.
There was no legal limit on how much a private landlord could increase the rent by. However, it could be challenged by tribunals if not deemed to be ‘fair and realistic’ compared to similar properties in the local area.
There was no strong legal means of preventing landlords from encouraging or accepting offers above the rental price advertised.
There was also a potential loophole whereby a landlord could technically issue a Section 21 ‘no-fault’ eviction notice, with two months’ notice, at any time but without giving a reason.
This eviction notice could pressure tenants into signing a new contract with higher rent, but it is another practice coming to an end under the Renters’ Rights Act.
Impact of the Renters’ Rights Act
Under the Renters’ Rights Act, from 1 May 2026 onwards, landlords can still only increase the rent once per year during a tenancy, but now there are several significant differences:
- Landlords still issue a Section 13 notice, now called Form 4A instead of Form 4
- Landlords must give two months’ notice of a rent increase instead of one month
- Increases must be line with ‘market rates’ i.e. the average rental prices of similar properties in the local area
- All tenancies are periodic – there are no more fixed-term assured tenancies and therefore, no more ‘rent review’ clauses
- There are no more Section 21 evictions – removing the potential loophole mentioned earlier whereby some landlords could try to pressure tenants into signing a new contract mid-tenancy
- Tenants can challenge excessive rent increases through a First-tier Tribunal (Property Chamber)
Also, landlords cannot encourage or accept offers above the advertised rent, ending rental ‘bidding wars’ – read my full guide on the Renters’ Rights Act for further details.
However, as before – after one tenant leaves, when a landlord or their agent resumes marketing the property to find a new tenant, they can still increase the asking rental price without limit. Again, if they set the price unrealistically high, demand is likely to be low.
With that in mind, how much can a private landlord increase rent by, once per year, during a periodic tenancy under the Renters’ Rights Act? How do you estimate ‘market rates’?
How much can a landlord increase rent by?
There is no one-size-fits-all guide to measuring a rental asking price increase against ‘market rates’, but there is a wide range of criteria you can use to inform an estimate.
Criteria to determine consistency with ‘market rates’ can include, but is not limited to:
- Recent local lettings: Benchmarking the property against similar nearby ones, e.g. with the same number of bedrooms, in the same street or postcode.
- Inflation: Rental increases often take into account the Consumer Prices Index including owner occupiers’ housing costs (CPIH) – it rose by 3.6% in the 12 months to December 2025, according to the Office for National Statistics (ONS).
- Wage growth: Rising total wage growth, measured by Average Weekly Earnings (AWE) data, can also help justify rent increases. It increased by 4.7% year-on-year in November 2025, the ONS reports.
- Mortgage rates: Changing mortgage rates also have an impact. Recent years have seen record lows (2021) followed by a dramatic spike in 2022-23 and currently, a plateau in 2024 and a gradual descent since 2025, according to Mortgageable.
- Supply and demand: High demand with low local supply tends to increase rental values, with the opposite pattern having a contrasting effect.
- Proximity: Is the property closer to, or further away from, desirable nearby amenities such as good transport links or parks in comparison to other similar properties in the area?
- Property condition: Recent renovations or energy efficiency upgrades (such as a better EPC rating) could help justify a rent increase. Conversely, ongoing disrepair or outdated features can have the opposite effect.
- Landlord operating costs: Rising landlord costs such as service charges, ground rent and compliance costs can also impact the asking rental price.
Final thoughts: Rent increases in London
On the Fine Living website, you can see how rental prices have increased over the past 12 months for several different areas in London.
At the time of writing, the average rental price has increased year-on-year by 4.2% in Hampstead, 5.5% in Islington and 5.8% in Shoreditch as well as the City of London.
An experienced estate agent should have the necessary up-to-date information to calculate how much to increase rent by, according to local market rates.
Local knowledge is also important. For example, the Fine Living team also studies market trends, migration patterns, local borough updates and new development news to inform properties’ rent prices.
If you found this guide helpful, other popular guides include:
If you own or are looking to buy a property, no matter the valuation, the team at Fine Living can help you with the estimates and projected annual costs.
We stay updated with the very latest legislation, market trends and data, so please don’t hesitate to contact the Fine Living team for more information.
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