How and when landlords can increase rent in Wales
When The Renting Homes (Wales) Act (RHWA) came into force in December 2022, it altered many of the procedures that landlords had become familiar with.
The way in which landlords can increase rent – and when – changed. To avoid making a mistake and waiting longer than is necessary to receive an increased rent, it’s vital landlords are familiar with how things must be done.
Additionally, Welsh Government made a surprising decision – or omission, perhaps – concerning rent levels and the ability to challenge rent increases, which we explain below.
Am I always able to increase a rent, regardless of the type of contract I have?
As was the case before RHWA, rents cannot be varied during a fixed-term, so if you have a contract with a specific end date, the contract-holder (tenant) has the peace of mind that the rent will not go up until the fixed-term has ended.
Rent can only be varied when the contract is a periodic one, i.e. rolling from one period to the next with no specific end date.
How much notice do I need to give my contract-holders to increase the rent?
At least two months’ notice. Prior to RHWA, landlords only had to provide one month’s notice.
The legislation doesn’t appear to prevent a landlord from issuing notice within the fixed-term to expire after the fixed-term, i.e. if/when the contract becomes periodic. This allows a landlord to ensure that the increased rent is effective from the start of any potential periodic contract, rather than having to wait.
The notice doesn’t need to expire on any specific date, meaning the rent can be increased during a rent period, if desired. So if the contract-holder pays their rent on the 1st of each month to cover the whole month ahead, the rent increase can be effective from the 8th, for example, as long as at least two months’ notice has been given. However, to avoid calculating pro-rata amounts and making contract-holders adjust their standing order more than once, we’d suggest it’s easier and cleaner for it to go up at the start of a rent period.
Does the notice need to be issued in a prescribed format?
Yes, it does. A knowledgeable agent or professional landlord will be able to issue it correctly on your behalf.
How often can a rent be increased?
Only once per year. So if the rent increased in March 2024, it can’t go up again until March 2025. A landlord could serve the minimum two months’ notice in January 2025, meaning the new increase becomes effective at the earliest possible opportunity, i.e. March 2025 (the 12-month mark).
Is there a limit to how much the rent can be set at?
Legally-speaking, there isn’t, which is somewhat surprising given rents on pre-RHWA tenancies were unable to be set at above market level.
Instead, perhaps refreshingly, it’s believed that Welsh Government is relying on market forces to dictate that rents aren’t set above market level.
Can a contract-holder challenge a rent increase?
Curiously, at this moment in time there is no provision in the legislation for a rent increase to be challenged. This is a notable difference to pre-RHWA times, when tenants could ask a tribunal to decide if a rent was fair or not.
That said, we’re informed that Welsh Government intend to amend the legislation to fix this in the future.
Let CPS Homes help
We're experts on The Renting Homes (Wales) 2016 Act and are helping prepare landlords for the changes. By instructing us to manage your property, we will...
- Work with you to put efficient processes in place well in advance of key dates for new legislation and regulations, ensuring you and your properties are compliant, safe and legal.
- Save you the cost of a Rent Smart Wales landlord licence and the hassle of ongoing training.
- Maximise your rental income by ensuring the property is always achieving its full potential.
- Provide you with your own representative within our Lettings and Accounts departments.
- Produce FREE, professional photography as part of our standard marketing package.
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- Provide you with peace of mind via our Client Money Protection (CMP) policy, professional indemnity insurance, and redress scheme membership.
To discuss CPS Homes taking over management of your property, contact our Senior Property Investment & Market Advisor, Rhys Owen, today via rhys.owen@cpshomes.co.uk or 02920 668585.
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The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.
