Raising the rent is often a necessary step for landlords, whether to keep up with rising costs, reflect improvements in the property, or ensure the investment remains profitable. However, rent increases can be a sensitive issue, and if handled poorly, they can lead to tenant dissatisfaction, disputes, or even early departures.
The key to successfully increasing rent without losing tenants is communication, fairness, and timing. When tenants feel they are being treated fairly and the increase is justified, they are far more likely to accept the adjustment rather than seek alternative accommodation.
Understanding When and Why to Raise Rent
There are several reasons why a rent increase may be necessary, including:
- Inflation and rising costs – Increases in mortgage rates, maintenance expenses, insurance, or utility costs may require landlords to adjust rent.
- Property improvements – If you’ve recently upgraded the property (such as installing new appliances, improving insulation, or redecorating), a rent increase may be reasonable.
- Market conditions – If demand for rentals in your area has risen, adjusting rent in line with market rates ensures your property remains competitive.
- Legislative changes – New regulations (such as stricter EPC requirements) may increase landlord costs, necessitating rent adjustments.
Before increasing rent, check local market rates. If similar properties in the area are charging significantly more, tenants are more likely to accept an increase as a fair adjustment. However, if your property is already at the higher end of the price range, an increase could push tenants to look elsewhere.
How to Raise Rent While Keeping Tenants Happy
1. Give Plenty of Notice and Be Transparent
Tenants appreciate honesty and time to prepare for any financial changes. Under UK law, landlords must provide at least one month’s notice for periodic tenancies (month-to-month agreements) and at least six months’ notice in Scotland. If the tenancy is a fixed-term contract, the rent can only be increased when the tenancy is renewed, unless the agreement includes a rent review clause.
Rather than simply informing tenants of an increase, explain the reasoning behind it. If costs have gone up or improvements have been made, providing this context makes tenants feel the increase is justified.
2. Keep the Increase Reasonable
A sudden, sharp rise in rent is more likely to cause tenants to leave, especially if they can find a similar property at a lower price. Smaller, incremental increases over time are easier for tenants to manage and accept.
For example, increasing rent by £25–£50 per month may feel more manageable than a sudden £200 jump, even if the long-term financial impact is the same. If tenants feel the increase is proportionate to the market and the property’s condition, they are less likely to dispute it.
3. Offer Incentives for Staying
If a rent increase is necessary, offering small benefits can soften the impact and encourage tenants to stay. This could include:
- Free minor upgrades (such as repainting a room or replacing worn carpets).
- Locking in a longer-term tenancy with a fixed rate to reassure tenants that rent won’t increase again soon.
- Flexible payment options, such as spreading a larger increase over a few months.
These small gestures show tenants you value their business and are willing to work with them rather than simply maximising profit.
4. Maintain a Good Landlord-Tenant Relationship
A tenant who feels valued is more likely to accept a rent increase than one who has had ongoing issues with repairs or poor communication. Regular property maintenance, quick response times, and a professional approach all contribute to tenant satisfaction.
If your tenants are happy with the property and trust you as a landlord, they are less likely to move over a reasonable rent increase. On the other hand, if they are already dissatisfied, an increase may be the final push that sends them looking for a new home.
5. Offer a Gradual Increase Over Time
If a significant rent increase is necessary, consider phasing it in gradually rather than applying it all at once. This could mean raising rent by a smaller amount now, with a planned increase in six or twelve months.
For example, if an increase of £100 per month is required, you might introduce £50 now and £50 in six months. This gives tenants time to adjust and reduces the likelihood of them seeking alternative accommodation.
6. Be Willing to Negotiate
Some tenants may struggle with a rent increase due to personal financial circumstances. Being open to negotiation—such as offering a smaller increase in exchange for a longer lease—can help keep a good tenant while still achieving a fair rental adjustment.
For example, if a tenant expresses concern, you could agree to a lower increase in exchange for a 12-month renewal rather than a rolling contract. This provides security for both parties and ensures ongoing rental income.
What If a Tenant Refuses the Rent Increase?
If a tenant refuses to accept a rent increase, consider whether it’s worth losing them over the adjustment. A reliable tenant who pays on time and takes good care of the property may be worth keeping, even if it means holding off on an increase for now.
However, if an increase is necessary, landlords have the legal right to issue a Section 13 notice (in England and Wales) for periodic tenancies, which formally notifies tenants of a rent increase. If the tenant believes the increase is unfair, they can challenge it through a rent tribunal, which will assess whether the increase is justified based on market conditions.
Final Thoughts
Raising rent doesn’t have to mean losing tenants. A well-planned, transparent approach that prioritises fairness and communication can help landlords implement rent increases without causing disputes or vacancies. By providing plenty of notice, keeping increases reasonable, and maintaining a good landlord-tenant relationship, you can balance financial sustainability with tenant retention.
Would you like personalised advice on rent reviews? Or need help assessing fair market rates for your property? Let us know how we can assist you.
