📈 How to Legally Increase Rent in the UK

🏡 Introduction: Landlords Are Asking the Right Question — But Is It the Right Strategy?

In today’s unpredictable rental market, many UK landlords are exploring how to increase rent legally. With mortgage rates rising, energy bills fluctuating, and inflation eating into profits, raising rental income seems like the natural next step.

But here’s the truth:

Raising rent on a long-term tenancy might not be your most effective—or profitable—strategy.

The rental landscape in the UK has shifted. While traditional long-term tenancies remain the norm, more and more landlords are pivoting to short-term letting models. Why? Because in cities like York, the potential returns from short lets often far exceed those of long-term tenants—without breaching any laws or causing disputes.

In this article, we’ll cover:

• Your legal options for raising rent as a landlord in the UK

• The limitations of long-term rentals

• How short letting (e.g. Airbnb) can significantly boost your income

• The pros, cons, and legal considerations of making the switch

• How a professional partner like York Airbnb Management can handle everything for you

✅ How to Increase Rent Legally in the UK (Without Breaking Tenant Law)

Landlords in the UK are bound by the Housing Act 1988 and other updated legislation. You can’t raise rent arbitrarily, but you do have three main legal routes to increase rent on a residential property:

1. Rent Review Clause in the AST

If your Assured Shorthold Tenancy (AST) agreement includes a rent review clause, this clause outlines how and when you can raise rent. It must be:

• Fair and transparent

• Explained in the tenancy agreement

• Supported by comparable market rates

2. New Tenancy Agreement at Renewal

When a fixed-term tenancy ends, you are within your rights to offer a new contract at a higher rate. The tenant is free to accept, negotiate, or leave.

3. Section 13 Rent Increase Notice

For periodic tenancies, landlords can issue a Section 13 Notice, proposing a rent increase with at least one month’s notice. Tenants have the right to challenge it in tribunal if the increase is deemed excessive or unfair.

📌 Remember: You must give reasonable notice, and the increase must reflect local market conditions. Rent increases that are too aggressive may result in tenant disputes or early move-outs, costing you money in the long run.

📉 Why Legal Rent Increases Have a Ceiling

Even if you raise rent legally, your profit increase might be minimal. For example:

• A 5% increase on a £900/month rental = +£45/month

• Annually: £540 extra, before expenses

Now factor in:

• Property maintenance

• Letting agent fees (often 10%–15%)

• Periods of vacancy

• Risk of non-payment

The result? You might net just £200–£400 per year, hardly transformative.

💡 The Alternative: Short Lets That Earn 2x–3x More

Enter short-term letting—also known as “short lets” or “Airbnb letting.”

Instead of renting your property for £900 per month, you could charge £100–£140 per night to tourists, professionals, or short-term contractors.

📊 Example: Central York Apartment

• Long-term rent: £900/month → £10,800/year

• Short let: £120/night × 20 nights/month = £28,800/year

• Potential uplift: +£18,000/year (before expenses)

Even accounting for cleaning, platform fees, and occupancy fluctuations, short lets can outperform traditional rentals significantly.

🏆 Benefits of Short-Term Letting for Landlords

✅ Higher Cash Flow
Nightly rates mean more flexibility and higher average returns, especially in high-demand areas like York.

✅ Frequent Property Access
You’re not locked into long contracts. You can inspect and maintain the property more often.

✅ Flexibility for Personal Use
Need the flat for friends, family, or yourself? Block out the calendar and enjoy your own property.

✅ Reduced Risk of Rent Arrears
Guests pay upfront via platforms like Airbnb, reducing the risk of non-payment or legal eviction proceedings.