What is a Section 13 notice? A guide for landlords

Rising mortgage costs and inflation mean that you may need to increase your rent over time. Almost half (47 per cent) of landlords increased their rent between 2022 and 2023, according to Simply Business research.

Depending on the type of agreement you have with your tenants, there are steps you need to follow to increase the rent in the right way.

If you can’t come to a mutual agreement with your tenant, a Section 13 notice is a formal way to request a rent increase. Read on to find out how Section 13 works and what counts as a fair rent increase.

What is Section 13?

Section 13 is part of the Housing Act 1988. It’s a formal process that requires the landlord to fill out a specific form and serve it to the tenant.

A Section 13 notice is usually served if the landlord has spoken to the tenant about increasing the rent but they can’t reach an agreement. If the tenant accepts the Section 13 notice, they’ll start paying the new rent from their next payment day.

Landlords can only serve a Section 13 notice once a year.

How much can a landlord increase rent by?

There’s no limit on how much landlords can increase their tenant’s rent. However, the government says it must be:

• fair and reasonable
• in line with average local rates

What is a fair rent increase?

What counts as a fair rent increase is likely to depend on how much your tenant currently pays.

The Simply Business Landlord Report found that of landlords who increased their rent between 2022 and 2023:

• 22 per cent increased rents by between one per cent and five per cent
• 22 per cent increased rents by between six per cent and 15 per cent
• four per cent increased rents by more than 15 per cent

In comparison, social housing rents usually increase annually in line with inflation. However, in 2023 social rent increases were capped at seven per cent due to the cost of living crisis.

How to serve a Section 13 notice

To serve your tenant with a Section 13 notice, you’ll need to fill out a ‘Tenancy form 4’, which you can download from the government website.

The form requires you to fill in:

• the existing rent
• the new rent
• the starting date for the new rent

It also includes guidance notes for landlords on how to complete the form and guidance notes for tenants on what they must do after being served with the form.

Once you’ve completed the form, you deliver it to the tenant by post, in person, or by email.

Increasing the rent is a sensitive issue, so make sure you seek professional advice if you’re unsure of anything.

Section 13 can only be used for periodic tenancies

One of the most important things to note is that a Section 13 notice can only be served if the tenant is on a periodic tenancy (a tenancy without a fixed end date).

On top of this, you can only use a Section 13 notice after the first year of the periodic tenancy.

Read more: A guide to the different types of tenancy agreements

What is a Section 13 notice period?

The minimum notice period for tenants who pay rent monthly or more frequently (weekly or fortnightly) is one month.

If your tenants pay their rent annually, then the minimum notice period for serving a Section 13 notice is six months.

Common mistakes when completing a Section 13 form

For a Section 13 notice to be valid, it must be filled out correctly. Here are some of the things it’s easy to get wrong:

• tenants’ names and property details
• the date when the new rent is due to be paid from
• the value of the old rent and the value of the proposed new rent
• the notice period

How can a tenant accept a Section 13 rent increase?

The tenant can respond to the Section 13 notice to accept the rent increase. Equally, if the tenant doesn’t respond to the notice, then it’s assumed they accept the increase and will be required to pay the new rent.

If the tenant doesn’t accept the proposed increase, they can speak to their landlord to come to an agreement.

Alternatively, if they don’t want to speak to the landlord, they can refer the proposed increase to a First-tier Property Tribunal, which will assess the case and set a new rent for the property.

The tribunal may set a rent that is higher, lower, or the same as the proposed new rent as it will be based on what rent the landlord could expect to charge for the property if they rented it out to new tenants on the same terms.

Rental reforms – what next for Section 13?

As part of proposed rental reforms, fixed tenancies will be scrapped and replaced with rolling (periodic) tenancies with no fixed end date.

As a result, Section 13 (or a similar process) will be the only way for landlords to request a rent increase.

It’s been suggested that once rental reforms have been introduced, the minimum notice period for increasing the rent will be doubled from one month to two months. It’s also expected that landlords will still only be able to increase the rent once a year.

What are the other ways for landlords to increase the rent?

If a landlord wants to increase the rent, the first port of call is usually to come to a mutual agreement with the tenant.

To do this, you’ll need to contact the tenant about the proposed increase and if they agree, send them a written agreement. This will need to include the value of the new rent and the date from which it will need to be paid.

For the new rent to become effective, both the landlord and the tenant will need to date and sign the agreement. It’s important that you keep a record of the signed agreement.

A rent review clause is another way to increase the rent in your property, but it’s only valid during fixed-term tenancies.

This clause, included in the tenancy agreement, should give details of:

• by how much the rent could increase
• the notice period required before a rent increase
• when during the fixed-term the review will take place

Once a tenancy moves from fixed-term to periodic, the rent review clause will no longer be valid and the landlord will need to increase the rent by mutual agreement or Section 13 notice.

Rising cost of living impacts rent rises

For many landlords, rising costs have meant they’ve had no option but to increase their rent. However, it’s important to remember that tenants’ costs are also increasing.

While a fair and reasonable rent increase may be necessary for your business, it’s important to consider whether your tenants can afford it.

If they can’t, they may need to move out, leaving you with an empty property and needing to invest more time and money in finding new tenants.

Researching local market rents, or speaking to a letting agent, should give you a better idea of how much you should be charging and what the average tenant in your area can afford.

Freezing rent – what are the benefits for landlords?

During the Covid-19 pandemic and as a result of the cost of living crisis, some landlords decided to freeze their rents to help tenants during a challenging time.

This meant a better chance of tenants paying their rent in full and avoiding rent arrears. A gesture like this could also encourage tenants to stay in the property for longer and treat it as their own home, benefiting landlords in the long-term.

Do you have any unanswered questions about Section 13? Let us know in the comments below.

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