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Rent levels

This content applies to England

Controls over the amount of rent that a landlord can charge, when and how often the rent can be increased, and the rules relating to tenancies at a low or high rent.

Local authority tenancies

Local authorities have the power to determine their own rent levels, but the law requires that they charge 'reasonable rents'.[1] More information on how the rent of these tenants can be set and increased can be foundon the page Local authority rents.

Secure PRPSH and protected private tenancies

Secure tenants of private registered providers of social housing (PRPSHs) and protected tenants of private landlords have a right to a fair rent fixed by a rent officer. More information on how the rent of these tenants can be set and increased can be found in the section on Fair rents.

A tenancy with a 'high' or 'low' rent cannot be a protected tenancy under the Rent Act 1977. For more information see: Tenancies excluded from protection.

Assured and assured shorthold tenancies

Landlords of assured and assured shorthold tenancies (ie PRPSHs and private landlords) can charge market rents. Assured and assured shorthold tenants of PRPSHs and private landlords will usually have higher rents than protected and secure tenants. However, housing association rents are generally lower than those in the private sector because they are subject to regulation by the Regulator of social housing (see the Regulator of social housing section for more information).

Some tenancy agreements contain a rent review clause governing rent increases. In some circumstances, assured and assured shorthold tenants have the right to apply to the First-tier Tribunal (Property Chamber) to have a market rent set. More information on how the rent of assured and assured shorthold tenants can be set and increased can be found in the section Market rents.

A tenancy with a 'high' or 'low' rent cannot be assured/assured shorthold: for more information see Tenancies that cannot be assured.

Tenancies let at affordable rents

All registered providers (RPs) of social housing (ie local authorities and PRPSHs) can grant tenancies at affordable rent. PRPSHs can grant affordable rent tenancies as either periodic assured tenancies (see the Assured tenancies section) or fixed-term assured shorthold tenancies, but not periodic assured shorthold tenancies (see the Assured shorthold tenancies section). Local Authorities can grant affordable tenancies as either periodic secure tenancies or flexible tenancies (see the Flexible tenancies section).

Affordable rents are rents of up to 80 per cent of the market rent that RPs are allowed to charge for the letting of certain residential properties to households eligible for social housing. The rent cannot be increased by more than the Retail Price Index (RPI) plus 0.5 per cent in any year. Any provision for the annual review of rent must be set out in the tenancy agreement.

For further information see the page on Affordable rents.

Tenancies at an exceptionally low or high rent

Tenancies with an exceptionally low or high rent, or no rent at all, are excluded from the statutory protection of the Rent Act 1977 and the Housing Act 1988. This means that such tenancies cannot be protected (regulated) or assured tenancies. (They would be unprotected tenancies with limited security of tenure.) See Tenancies excluded from protection for information on how high or low rent levels affect protected (regulated) tenancies, and Tenancies that cannot be assured for their effect on assured and assured shorthold tenancies.

The formula for calculating what constitutes a low or high rent was revised following the abolition of domestic rates on 1 April 1990.[2]

It is possible for contractual protected tenancies and assured tenancies to fall in and out of protection if rent increases or reductions take the rent above or below the low or high rent levels.

Tied accommodation

It can be difficult to establish whether or not an occupier of tied accommodation is paying rent for her/his accommodation. The occupier of tied accommodation may enter into an agreement with the landlord for the rent to be deducted from her/his wages at source (ie before s/he has been paid). Provided that the rent is quantified, s/he will still be treated as paying rent.[3]

In some instances, the amount will not have been quantified, but the tenant/employee will receive lower wages than s/he would normally get for the same job because s/he is being provided with accommodation. Whether the employee is actually paying rent or not should not affect whether s/he is considered a tenant or licensee, but it may affect whether or not s/he has statutory protection.

For further information see the section on Tied accommodation.

[1] s.24 Housing Act 1985.

[2] References to Rating (Housing) Regulations 1990 SI 1990/434.

[3] Montagu v Browning [1954] 2 All ER 601.

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