The Rules Around Setting Rents Have Changed – Here's What Landlords Need to Know
If you're a landlord in England, the way you set, review and manage rents has fundamentally changed. The Renters' Rights Act has introduced a raft of new rules that affect virtually every stage of the tenancy lifecycle – and rent is right at the heart of it. Whether you manage a single property or an entire portfolio, understanding these changes isn't optional. Getting it wrong could leave you exposed to legal challenges, financial penalties, and strained relationships with your tenants.
This article breaks down the key changes introduced by the Renters' Rights Act that relate specifically to rent setting and rent reviews, and explains what you need to do to stay on the right side of the law.
Why the Renters' Rights Act Represents a Major Shift
The Renters' Rights Act is one of the most significant overhauls of the private rented sector in decades. Designed to strengthen tenant protections and bring greater stability to the rental market, the legislation touches on everything from tenancy types and eviction rules to rent increases and dispute resolution. For landlords, it signals a move away from the relatively flexible framework that existed under the previous assured shorthold tenancy regime.
At its core, the Act aims to make renting fairer and more predictable for tenants – but this comes with real implications for how landlords can manage their income and structure their agreements. The days of informal rent reviews or simply issuing a new tenancy at a higher rate are largely over.
How Rents Can Now Be Set at the Start of a Tenancy
One of the most important changes relates to upfront rent collection. Under the new rules, landlords are restricted in how much rent they can ask for in advance. This is a direct response to the practice – particularly common in competitive urban markets – of landlords requesting multiple months' rent upfront as a way of securing high-demand properties or screening out tenants perceived as higher risk.
The Act limits advance rent payments, meaning landlords can no longer use large upfront sums as an informal vetting tool. This has practical implications for cash flow, particularly for landlords who relied on advance payments to cover mortgage commitments or refurbishment costs at the start of a tenancy.
It also means that the initial rent level set in a tenancy agreement carries more weight than before. Landlords need to be confident that the rent they advertise and agree at the outset is sustainable, accurate, and reflective of the market – because the mechanisms for adjusting it during the tenancy have become more structured and, in some cases, more restrictive.
The New Framework for Rent Increases During a Tenancy
Perhaps the most operationally significant change for landlords is the new process for increasing rent during an ongoing tenancy. The Renters' Rights Act has abolished assured shorthold tenancies and replaced them with a single system of periodic tenancies. Within this framework, landlords can only increase rent once per year, and must follow a formal statutory process to do so.
Specifically, landlords must use a Section 13 notice to propose a rent increase, and must give tenants a minimum of two months' written notice before the increase takes effect. This formalisation of the process means that informal conversations or letters simply won't cut it – the notice must be served correctly and within the proper timeframes.
Crucially, tenants now have a strengthened right to challenge a proposed rent increase they consider above market rate. They can refer the matter to a First-tier Tribunal, which will assess whether the proposed rent is in line with the open market. If the tribunal determines that the landlord's proposed increase is excessive, it can set a lower figure – and that figure is binding.
What Landlords Must Avoid Under the New Rules
The Act also specifically targets a practice that had become more common in recent years: using rent as an indirect eviction tool. Some landlords had been issuing dramatically above-market rent increases precisely because they expected tenants to leave rather than pay, effectively circumventing the formal eviction process. The Renters' Rights Act closes this loophole by empowering tribunals to scrutinise and override increases that appear punitive or unreasonable.
- Landlords cannot increase rent more than once every 12 months within a periodic tenancy.
- Any rent increase must be proposed via the correct statutory notice – informal methods are not valid.
- Attempting to use excessive rent increases as a de facto eviction strategy is now far more likely to be challenged and overturned.
- Advance rent requests at the start of a tenancy are now capped, limiting how much can be collected before a tenancy begins.
Practical Steps Landlords Should Take Now
Given the scale of these changes, landlords who haven't yet reviewed their practices should do so without delay. There are several concrete steps worth taking to ensure compliance and protect your rental income going forward.
- Review your rent levels now. If your current rents are below market rate, consider whether it makes sense to align them closer to market value before the new tenancy framework embeds further, since future increases will be subject to greater scrutiny and restriction.
- Familiarise yourself with the Section 13 process. Any rent increase during a tenancy must go through this channel. Make sure you understand the notice periods, the correct format, and the timeframes involved.
- Keep records of comparable market rents. If a tenant challenges a rent increase at tribunal, you will need to demonstrate that your proposed figure is in line with the open market. Keeping documented evidence of comparable properties will strengthen your position considerably.
- Seek professional advice if you're uncertain. Letting agents and property solicitors are well placed to guide you through the new requirements, particularly if you manage multiple properties or have complex tenancy arrangements.
The Bigger Picture for the Private Rented Sector
The Renters' Rights Act represents a clear signal of direction from government: the private rented sector is being reshaped with tenant stability and affordability at the forefront. For landlords, this doesn't necessarily mean bad news – but it does mean that the informal, ad hoc approach to rent management that some have relied upon is no longer viable.
Landlords who adapt quickly, operate transparently, and engage with the new statutory processes are well placed to continue running successful and profitable rental businesses. Those who ignore the changes or attempt to work around them face an increasingly robust regulatory environment that is likely to become more, not less, demanding in the years ahead.
Staying informed, seeking expert guidance, and reviewing your rent-setting practices in light of the new legislation is not just advisable – it is essential.