When to Raise a Tenant’s Rent – and When Not To

Increasing the rent on a rental property is a necessary part of managing a profitable portfolio, especially with high interest rates, insurance premiums and maintenance costs. But doing so at the wrong time can lead to vacancy, tenant disputes and even reputational damage.

Here’s a practical guide to help you decide when it’s appropriate to raise a tenant’s rent and when it might be best to hold off.

When You Should Raise a Tenant’s Rent

1. At the End of a Fixed-Term Tenancy

The most straightforward and legally clean time to raise the rent is when a tenancy is coming to the end of its fixed term. This gives tenants a chance to consider their options, and allows you to justify an increase in line with market conditions.

Give tenants clear notice of your intention to raise the rent before the term ends – typically at least one or two months in advance depending on your tenancy agreement and local rules.

Of course, when the Renter’s Reform Bill comes into force, there will be no more fixed-term tenancies. After this, you will be able to increase rent once a year at a maximum.

2. To Keep Up with the Local Market

If the rent you are charging is significantly below the going rate for similar properties in the area, a rent review might be in order. This is especially true if:

• Local rents have risen steadily over the last year

• You haven’t raised the rent for several years

• The property has been upgraded and now offers more value

Note: Always back up your proposed increase with comparables. Tenants are more likely to accept it if it feels fair and transparent.

3. When Your Costs Have Increased

Landlords face increasing costs, with mortgage repayments having skyrocketed in recent years, insurance bills rising and stricter compliance requiring additional investment. If you can no longer cover these costs reasonably with the current rent, a modest increase might be needed.

However, this still needs to be balanced against tenant affordability and market conditions.

4. When the Property Has Been Improved

If you’ve made significant improvements to the property, such as a new kitchen, upgraded heating system, better insulation or a renovated bathroom, a rent increase can reflect the added value.

Make sure you’ve communicated the benefits clearly before you raise a tenant’s rent. A better-quality home may warrant a slightly higher monthly payment.

5. After a Long Period of Stable Rent

Some landlords avoid rent increases for the sake of a quiet life. But if you’ve had long-term tenants and the rent hasn’t changed in years, a small, well-communicated increase is reasonable.

Phasing in small, regular adjustments can be more manageable than a large jump later on.

When You Shouldn’t Raise the Rent

1. During a Cost-of-Living Crisis (Without Just Cause)

While landlords also face financial pressure, raising rent during periods of national economic hardship without clear justification can be seen as opportunistic and damage relationships with tenants.

Consider whether keeping a reliable tenant outweighs a modest rental uplift that might push them out.

2. If the Property Condition Has Declined

If repairs have been delayed or the property is not in good condition, tenants may see a rent increase as unfair. Ensure all maintenance is up to date before proposing any change.

3. If It Risks Losing a Great Tenant

A good tenant who pays on time, communicates well and looks after the property is valuable. If you’re considering a rent increase that might cause them to leave, think carefully about the cost of reletting, including void periods, agency fees and uncertainty.

Sometimes, holding off on raising a tenant’s rent is a strategic move to preserve income stability.

4. When the Market Is Weak

If there is an oversupply of similar properties or demand is low, increasing the rent could make your property uncompetitive. Tenants may be tempted to look elsewhere, leaving you with an empty property.

Justify the Move to Raise a Tenant’s Rent

Raising the rent is sometimes necessary, but timing and communication are everything. Make sure any increase is:

• Justified

• Clearly communicated

• Compliant with tenancy law

• Balanced with long-term strategy

If you do choose to raise a tenant’s rent, ensure that your property management services, including up-to-date maintenance, are sufficiently professional and effective. When a tenant feels that you value their comfort and safety, they are more likely to be open to paying more for the property. Talk to us today about our property management services and how we can superserve your tenants. Call 0208 5757630.