It is now very common for landlords to look to increase the monthly rent under assured shorthold tenancies when the fixed term comes to an end. Many talk about general market increases, while others blame the government for their increasing costs by taking away mortgage interest relief and the requirements to meet new EPC standards by 2025.
On a theoretical level it is not an easy task for the landlord to increase rent at the end of the fixed term as they must technically serve notice under section 13 of the Housing Act 1988 and the tenant can then take their case to the First Tier Tribunal (Property Chamber) to ask them to set the rent at market value. However this is a lengthy and costly excursion for both parties, and the practical reality is very different: the landlord can simply serve a section 21 notice to evict the tenant outside of the fixed term if they don’t agree to the proposed rental increase.
However the government is making continual strong noises to abolish the section 21 notice (a ‘no fault’ eviction process), leaving the landlord with only a section 8 notice (where the landlord must prove the tenant is at fault) by which to evict the tenant.
Potentially good news for tenants, but does this swing the power too far in their favour? Once section 21 notices are abolished, the landlord will only be able to recover possession of their property in the event that the tenant is at significant enough fault (rent arrears, damage to property etc) to justify the court awarding a possession order. So if the tenant is never at fault the landlord may never recover possession of their own property.
Further, if a section 21 notice is not available as an incentive for the tenant to agree a rental increase, then the tenant can (i) refuse any requested rental increases at the end of the fixed term and take the matter to Tribunal and (ii) refuse to enter into any new fixed term tenancies, leaving the tenancy periodic forevermore. This would leave the tenant sitting in the property, after the first fixed term had concluded , with the landlord unable to evict and never able to raise the rent again as long as the tenants remain in the property.
The tug-of-war between landlord and tenant continues.
Published on 24/03/2022