Are tenants being given more power to challenge rent rises?
Plans are to make the first-tier property tribunal process easier for tenants to access, mainly via digitisation
The Renters (Reform) Bill includes plans to end the use of rent review clauses, “preventing tenants being locked into automatic rent increases that are vague or may not reflect changes in the market price." It also states that attempts to evict tenants “through unjustifiable rent increases are unacceptable."
As part of the amendments following the third reading on the issue of rent rises, tenants may be able to dispute whether a rent increase amount is valid through the First Tier Tribunal and not the County Court.
If the First Tier Tribunal agrees with the tenant, they can recover any increased rent they have paid through a debt claim in court. This would also apply if the landlord has increased their rent without giving a Section 13 notice.
There are a small but significant number of landlords who ask their tenants to shoulder large rises in rent which both campaigners, landlord groups and the Government agree, is wrong.
The question is, how to stop it. Rent controls have been rejected by both the main political parties in England and Wales.
Scotland tried out a rent rise cap of three per cent which ended on 31 March 2024.
There is a new rent increase procedure which applies in Scotland for rent increase notices issued from 1 April 2024 onwards.
The landlord can propose an increase of any amount and if the tenant wishes to challenge the increase, they can refer it to the rent officer, who must apply a tapering formula to the increase.
Any rent increase notices issued on or before 31 March 2024 are still capped at three per cent.
The A fairer private rented sector white paper was clear on the Government’s position:
We do not support the introduction of rent controls to set the level of rent at the outset of a tenancy. Historical evidence suggests that this would discourage investment in the sector and would lead to declining property standards as a result, which would not help landlords or tenants.
Consequently, the renting reforms in the original Bill are much tamer than Scotland’s approach; instead stipulating that landlords can only raise their rent once a year, by issuing a section 13 notice, making sure landlords give two months’ notice of a rise, and banning ‘rolling rent increases’ from being written into tenancy contracts.
Currently, if a tenant disagrees with a rent rise, then they must engage with a time-consuming and lengthy battle via a property tribunal which, the figures show, very few tenants bother to use.
Yes, tenants should have stronger abilities to challenge
No, tenants should have limited power
I don't think there should be any change
The Bill states that in cases where increases are disproportionate, the Government will "make sure that tenants have the confidence to challenge unjustified rent increases through the First-tier Tribunal" and it will “prevent the Tribunal increasing rent beyond the amount landlords initially asked for when they proposed a rent increase.”
The Government wants to make this First Tier Property Tribunal process easier for tenants to access mainly via digitisation.
But this has been criticised because it does not come with additional funding for the tribunal system, which will be unlikely to cope adequately with a sudden increase in tenants challenging rent increases.
A parliamentary housing committee noted that pushing more tenants towards tribunals would ‘swamp’ the system, saying that:
It is not clear whether the Government fully appreciates the extent to which an unreformed courts system could undermine its tenancy reforms.
This is one of the issues in the Bill that will need to be ‘ironed out’.
It also noted that the improvement to the tribunals system to enable tenants to challenge rent increases was not about affordability, but in order to stop some unscrupulous landlords using rent increases as a ‘back door’ Section 21 eviction.
