Rent Increases: What’s Reasonable, What’s Defensible, and What Will Change Under the Renters Reform Act
Rent increases have become one of the most sensitive and closely scrutinised areas of property management.
Rising mortgage rates, higher compliance costs, and increased contractor pricing have pushed many landlords to review rents while at the same time, proposed legislative reform is reshaping how and when increases can be enforced.
The key question is no longer simply “Can I increase the rent?” but increasingly:
“Can I justify it and what happens if it’s challenged?”
Why Rent Increases Are Under Pressure
Landlords are facing sustained cost increases across almost every area of ownership, including:
Mortgage interest rates
Insurance premiums
Licensing and compliance fees
Fire risk assessments and remedial works
Contractor and material costs
Management overheads
These pressures are real and unavoidable. However, under both existing law and the forthcoming reforms, rising costs alone do not automatically justify a rent increase.
Rent must still reflect market value, not landlord expenditure - This is one of the things The Renter’s Reform Act looks to address.
What Is Considered “Reasonable”?
There is no fixed or “safe” percentage increase.
A rent increase is generally considered reasonable where it:
Aligns with rents achieved for comparable properties locally
Reflects the condition, size, and amenities of the property
Is implemented using the correct legal process
Increases that significantly exceed local market levels are far more likely to be challenged.
Evidence Is Now Critical
Landlords should be prepared to evidence any increase with:
Comparable rental listings or recent lettings
Local market data
A clear rationale for the proposed figure
Simply citing increased mortgage costs or inflation is unlikely to be sufficient if a rent increase is challenged.
This is where professional management adds real value, providing an objective, experienced voice to sense-check proposals, listen to concerns, and work through the rationale behind an increase before anything is implemented or enforced. Taking this measured approach can help avoid unnecessary disputes, costly delays, and the risk of undermining what might otherwise be a positive and harmonious relationship with a reliable, good-paying tenant.
How the Renters Reform Act Changes Rent Increases
One of the most significant changes introduced by the Renters Reform Act is the way rent increases can be challenged and paused.
Under the new framework:
Tenants will have a clear statutory right to challenge a rent increase
If a tenant challenges the increase, it becomes unenforceable while under dispute
During this period, the landlord cannot collect the increased rent
If the matter proceeds to the First-tier Tribunal, the tribunal will determine the market rent
Crucially:
Even if the tribunal later decides the proposed rent increase is reasonable, the increase cannot be backdated.
This means that:
Any delay caused by a challenge results in lost income that cannot be recovered
The new rent only applies from the tribunal’s decision date forward
This represents a meaningful shift in risk from tenants to landlords. In practical terms, delays within the court and tribunal system mean it could be several months before a First-tier Tribunal hearing is even scheduled, creating further financial exposure for landlords. That said, outcomes are often influenced by how rent increases are handled and communicated. A considered, transparent approach can play a significant role in whether a tenant views referral to the First-tier Tribunal as a necessary or worthwhile course of action. Another reason why you might want a professional handling this on your behalf.
Why Process and Timing Matter More Than Ever
Given these changes, poorly considered rent increases carry greater financial risk.
Common pitfalls now include:
Proposing increases without robust market evidence
Setting rents too high “to see what happens”
Serving increases without factoring in challenge delays
Under the new system, an overly ambitious increase may result in:
Months of frozen rent
Tribunal involvement
A rent set lower than originally proposed
Irrecoverable lost income during the challenge period
The Practical Reality for Landlords
None of this means rent increases are disappearing. It does mean they must be:
Market-led
Defensible
Proportionate
Strategic
Landlords who take a measured approach — supported by evidence — are far more likely to:
Avoid challenges altogether
Have increases upheld quickly
Protect long-term income
Those who do not may find that even “reasonable” increases come at a cost. Rent increases are no longer just a financial decision, they are a regulatory and procedural one.
Under the Renters Reform Act, the emphasis shifts firmly towards:
Fairness
Evidence
Transparency
A rent increase that cannot withstand scrutiny may cost more in delay and disruption than it delivers in income.
If you are considering a rent review, it is worth sense-checking both the figure and the strategy before proceeding. That’s where Rental Asset Management could help you.