Section 13 Notice: A Landlord's Guide to Rent Increase

When you are a landlord or property owner who lets their properties to tenants, it is necessary at times to increase the rent, perhaps to meet increased costs, make improvements to the property, bring the rental value in line with other properties in the neighbourhood, or fund mortgage payments. Section 13 rent increase notices are an official way of informing tenants that the rent will go up – see my guide below for all you need to know about Section 13.

Table of Contents

What Is A Section 13 Notice?

A Section 13 Notice is an official notice that allows a landlord to increase the rent on their property. Part of the Housing Act 1988, Section 13 allows for a rental increase that can be considered fair, realistic and in line with average local rent. The upcoming Rental Reform Act could change this, but for now, Section 13 is a legally prescribed way of increasing rent on a property.

When You Can Use A Section 13 Notice?

A Section 13 notice can only be used for assured periodic tenancies or assured shorthold tenancies in cases where a rent review clause is not already included in the contract. Fixed-term tenancy agreements will need a contract clause that allows for rent increases, or you could wait until the fixed term is over to increase the rent.

Section 13 notices can only be issued once per year, and a minimum notice period applies. For monthly rental payments, the minimum notice period is one month, and for rent paid yearly, six months’ notice is required. You also need a written tenancy agreement in place to use a Section 13 notice, which is something you should already have.

Ready To Build Job Replacing Income With Property?

How To Issue A Section 13 Notice?

The first thing you need to do is complete Form 4 in full and then serve it to the tenant. You can download Form 4 from the gov.uk website, including guidance on how to fill it in correctly. Take note of this, as if an incorrect or incomplete form is served, the notice will be invalid.

The notice must then be delivered to the tenant, either personally by hand, through recorded delivery mail, or even by email if the tenancy agreement states that email communications for notices are accepted. In some cases, an official process server may be required. If the tenants are not at the property or refuse to accept the notice, you can fill in form N215, which is a certificate of service stating that you delivered the notice in person.

How Will The Renters Reform Bill Change Section 13?

The Renters Reform Bill will change Section 13 in a few ways, although as it is not part of UK law just yet, it is subject to change. Under this Act, all tenancies will become periodic, i.e. there will be no fixed-term tenancies, except for certain types such as student tenancies. The notice period for Section 13 notices will also double to two months for those who pay rent monthly.

The Renters Reform Bill is currently in the report stage in the House of Commons and will have to pass through several more stages including the House of Lords readings and Royal Assent before it is passed into law, although I recommend looking into it further so you can be prepared for the upcoming changes.

What Happens After You Serve A Section 13 Notice?

Ideally, the tenant will accept the rent increase and after the notice period has passed, they will start paying the new amount. If the tenants don’t respond, then it is assumed that they agree to the rent increase, provided you have delivered the Section 13 notice properly.

Tenants can also challenge the rent increase, either personally with the landlord, or via a First-Tier Property tribunal, also known as the Property Chamber. This tribunal will assess the rent increase to determine if it is unfair or unrealistic as per the Housing Act 1988, and if it is in line with average rent payments in the local area. The outcome of the tribunal could even result in the rent being raised higher, depending on the circumstances. Tenants have until the end of the notice period to challenge the rent increase.

It’s always good practice to have clear and open two-way communication with your tenants so that you can both address any potential issues promptly and avoid any unpleasant surprises down the line. This applies to rent increases, contractual disagreements, property maintenance, and more. If you foresee any complex situations or legal uncertainties, consult with a solicitor or other legal professional for advice.

Can Landlords Increase Rent Without A Section 13 Notice?

It is of course possible to increase the rent without issuing a Section 13 Notice, either by reaching a mutual agreement with tenants or by a rent review clause as part of the tenancy agreement. If you reach a mutual agreement, you will need to both sign and date a written document stating the accepted rent increase. As with any contractual agreements, make sure you keep hard copies of all documents for your records.

To raise the rent by using a rent review clause, this needs to be written into the tenancy agreement and agreed on by both parties at the beginning of the tenancy, or when the contract is renewed in the future. Fixed-term contracts could include a built-in rent increase after a set period, for example, a tenant may agree to pay £1000 per month for the first 12 months of a fixed-term 24-month contract, and then pay £1,200 per month for the second half of the contract.

While there is no hard definition as to what constitutes a ‘fair and realistic’ rent increase as stated in the Housing Act 1998, remember to do adequate market research first and consider all potential future outgoings before settling on an amount. Raising the rent by too much could make you unpopular with tenants and run the risk of them moving out, and leaving you with an empty property with no rent to cover your mortgage or other costs. Taking the time to do proper research into average rental values in the local area and seeking expert or legal advice beforehand should avoid problems like this.