Looking to raise the rent, but feel unsure about how to communicate this to your tenant?
Many landlords feel the tension of rising costs balanced against their desire to keep the rent affordable for reliable tenants. Even so, there comes a point where it becomes necessary to raise the rent – and that is where our sample rent increase notice letter comes in. Our free, flexible template makes this as easy as possible for landlords who find themselves in this position.
A notice of rent increase letter does pretty much what it sounds like it should – it notifies tenants of a planned and upcoming rent increase and this free rent increase notice template can help you a lot.
There is usually no limit on the amount that a rental agreement can be raised, but it is assumed that you will want the tenant to agree to the increase and sign on the dotted line.
It should also go without saying that you should give plenty of notice ahead of time, tenants are usually given at least 1 month’s notice before any rental increase.
How to serve a rental increase letter
Our rent increase letter notice template can be used by a property manager, agent or landlord to notify of rental increases. The notice is usually sent in the post as a physical letter, but they can be sent via email too – it all depends on the type of communication that the landlord and the tenant have.
When can a landlord use our rent increase template?
There are guidelines you need to follow if you intend to raise the monthly rent for your tenants, with restrictions applying depending upon the type of tenancy (e.g. fixed term tenancy or periodic tenancy).
Generally speaking, a landlord can increase the rent using a notice on four types of occasion:
- The end of an annual lease
- Before a rental agreement expires
- The middle of a lease
- The end of a month-to-month lease
- Where there is a break clause in the fixed-term tenancy
- When the conditions are met to serve a section 13 notice for a periodic tenancy
It is much more common for a rent increase when the tenancy agreement is either set to come to an end or if a renewal is coming up. However, rent increase are normally allowed only once per year, unless there is a mutual agreement made between the landlord and tenant to do so earlier.
Rent increases are used by, and for:
- Landlords that manage their own properties
- Property managers with multiple properties
- Month-to-month paying tenants
- Annual or multi-year tenants
- Tenancy agreement renewal before a lease expires
- Altering the lease renewal date
- Encouraging a tenant not to renew the lease (when selling the property, for instance)
- Tenants that landlords inherit when on purchase of a property
Landlords increase rent for various reasons, often related to rising costs to maintain the property, a more expensive mortgage, or economic inflation.
TIP: Read 5 Things to know before letting your property
What is the notice period when sending a rent increase letter?
As a landlord, you must give at least one month’s notice (if tenant pays rent weekly or monthly). Or if the tenant has a yearly tenancy, you must provide them with 6 months’ notice. A notice of rent increase letter is ideal for yearly tenants and also month-to-month paying tenants on private residential tenancies.
What about a Section 13 rent increase letter?
Section 13 rent increases are used specifically for raising the rent on periodic tenancies, and are found under Form 4 on the government website. In this circumstance, landlords can only use the specific form provided, and not increase the rent again for the next 52 weeks. Rents must only be raised to the ‘market level’ and if they are not, then the tenant may choose to challenge the decision in a first-tier tribunal.
It is worth saying that when the Renters Rights Bill finally becomes law, this will be the only formal method to increase the rent, as virtually all residential tenancies will become periodic.
What all rent increase letter notices need
Rental increase letters need certain elements to make them legal, which is why our free template is so handy. These elements also make things clear to the tenant, and so avoids confusion.
Regardless of the type of increase (monthly, yearly etc.) the components are the same – the only real difference is the dates that need to be included in the rent increase letter.
Landlord or property management contact details
These details will normally be placed at the top so that the tenant can see right away who the notice is from and also make it easier for your tenant to contact you. The information contained here includes your name (or company name), address, telephone number, and email address.
That day’s date for the rent increase letter
This is the date that you wrote the written notice before increasing the rent amount, and you need to include a few days for it to arrive before the start of the notice period. Realistically then, if you are giving a notice period of 30 days then you should allow for 35 days – this gives the letter plenty of time to arrive.
Change in rent notice to tenant
This is, of course, the subject of the letter. It is also a good idea to use “change in rent notice” instead of “rent increase notice,” as the latter can put a tenant on the defensive. The wording is important, and you can choose a different way of saying it, but it needs to convey the intention without being pushy or rude. You want to minimise conflict so that you don’t reach a point where you feel you need to serve a section 21 notice to evict the tenants.
Greeting the tenant
Wording really matters here too. “Dear tenant” is used by some, but using the tenant’s first name can be a better idea – it identifies the tenant as an actual person first, and a tenant second.
Body of the rent notification letter
The body of the rent increase letter notice can be created in any style that you prefer, but you need to include the start date for the new rent increase. You should also state the address of the property, the amount of the rent that is currently payable. Also, state that the named person is a tenant at that property and that all other terms of the tenancy agreement will not change.
A good idea is to include a phrase along the lines of “Thank you for your understanding of the rent increase and cooperation”, and if they have any questions, they should feel free to get in touch. This makes things look more like an agreement and less like a demand.
Closing lines
This is where you end the letter, before stating your name and signing. The closing lines are very standard and consist of things like ‘Thank you”, “Best regards”, etc.
Landlord name
The final part of the rent increase letter notice needs to be comprised of your name, signature, title (landlord, property manager etc.).
Constructing rent increase letter notices is quite straightforward if the required elements are remembered. Our free printable rent increase letter UK template, however, is going to make your life much easier.
Notice of rent increase letter template – An example
Now we’ve explained the different components of a rent increase letter, it’s time to look at a real example which leads you through the different sections you should attempt to include:
[Your Name]
[Your Address]
[Your Postcode]
[Your Contact Number]
[Your Email Address]
[Tenant’s Name]
[Property Address]
[Postcode]
[Date]
RE: NOTICE OF RENT INCREASE – [Property Address]
Dear [Tenant’s Name],
I hope this letter finds you well.
[NOTICE OF RENT INCREASE]
I am writing to inform you that the rent for the property at [Property Address] will be increased from £[Current Rent Amount] per [week/month] to £ [New Rent Amount] per [week/month], effective from [Effective Date Rent Is Due].
This represents an increase of £ [Amount of Increase] per [week/month] or [Percentage]%.
[LEGAL BASIS FOR INCREASE]
This rent increase is being implemented in accordance with:
- [For Assured Shorthold Tenancies] Section 13 of the Housing Act 1988 (as amended)
- [For Periodic Tenancies] Clause [X] of your tenancy agreement dated [Original Agreement Date]
- [For Fixed-Term Tenancies with rent review clause] The rent review clause (Clause [X]) in your tenancy agreement dated [Original Agreement Date]
[JUSTIFICATION FOR INCREASE]
The decision to increase the rent has been made after careful consideration of the following factors:
- Current market rental values for comparable properties in the area
- Increased costs of property maintenance and management
- Property improvements made during your tenancy, including [list any significant improvements]
- Inflation and increased cost of living
- [Any other relevant factors]
[OPTIONS TO RESPOND]
Please confirm receipt of this notice by [Response Deadline Date]. If you have any questions or would like to discuss this increase, please do not hesitate to contact me on [Your Contact Number] or via email at [Your Email Address].
If I do not hear from you by [Response Deadline Date], I will assume that you accept this rent increase.
[ANY ADDITIONAL INFORMATION]
[For Assured Shorthold Tenancies] Please note that you have the right to refer this notice to the First-tier Tribunal (Property Chamber) if you consider the new rent to be unreasonable. Any application to the Tribunal must be made before the effective date of the increase stated above.
[For Fixed-Term Tenancies] This increase will take effect when your current fixed term ends, and your tenancy converts to a periodic tenancy, unless you sign a new fixed-term agreement beforehand.
[Optional] I value you as a tenant and would like to take this opportunity to thank you for your care of the property during your tenancy.
Yours sincerely,
[Your Signature]
[Your Full Name]
TIP: Creating and agreeing to an inventory with your tenant at the start of the tenancy could prove essential in a dispute. Download our free landlord inventory template here.
