The rent control you’ve never heard of (part 1)

Renting in the private rented sector? Think your rent is too high? You might be one of the 60% of Britain in favour of introducing rent controls. However, you might be surprised to know that rent controls already exist in England.

No, these are not the often-discussed historic ‘fair rent’ properties, the volume of which has dwindled to very small part of the market. Under ‘regulated’ tenancies, tenants are entitled to a ‘fair rent’ set by the Valuation Office Agency, but this does not apply to contracts signed from 1989.

If you’re not living in a ‘fair rent’ property and instead you pay market rent, your rent is still technically subject to regulation. That is, if you are living in an Assured Shorthold Tenancy (AST) or an assured tenancy, which is likely, since these tenancies make up the private rented sector.

The law allows AST and assured tenants to appeal to the First-tier Tribunal Property Chamber in some circumstances if they think their rent, or rent increase, is excessive.

What the law says

According to HM Courts and Tribunal Service, market rent cases can be referred to the tribunal in one of four situations. Below are two most commonly encountered.

The technical jargon: ‘Where the landlord under an assured, or assured shorthold, periodic tenancy has served a notice on the tenant, under section 13 of the Housing Act 1988, proposing a rent increase to take effect at the beginning of a new period of the tenancy specified in the notice. At any time before the proposed date of increase, the tenant may refer that notice to this tribunal for an assessment by the tribunal of the rent to be payable. The tribunal must receive that application before the date specified in the landlord’s notice of increase.’

What it means: If your landlord increases your rent by serving a notice (this is called a Section 13 procedure) and you think the increase is excessive, you can refer the increase to the tribunal to determine a reasonable rent. (In reality, most AST landlords do not bother with the section 13 procedure, instead they sign a tenant up on a new tenancy every year on an increased rent.)

The technical jargon: ‘Where a tenant, under an assured shorthold tenancy, is dissatisfied with the rent payable under the tenancy, an application can be made to this tribunal under section 22 of the Housing Act 1988, provided it is received within the first six months of the initial tenancy. If the tribunal considers the rent to be significantly higher than could reasonably be expected, the tribunal will determine a market rent for that tenancy.’

What it means: If an AST tenant is not satisfied with their rent, they can appeal to the tribunal to make a decision on a reasonable market rent. This must be within the first six months of the initial tenancy. If the tribunal thinks the rent is significantly higher than market rent, it will determine a new rent.

But few renters use them

If you didn’t know about this, it’s not surprising. Indeed, few private renters use this mechanism, which has been in place for nearly 30 years. According to the IPPR, there were only around 9,000 residential property tribunal cases in 2013/14 – and rent dispute cases are only part of their job, which encompasses right to buy, leasehold valuations, park homes and various other residential property issues.

So, if we already have rent regulation here, why don’t we use it? According to the Office for National Statistics, between January 2011 and January 2017, private rental prices in Britain increased by 14.3% – it’s clear that many private renters would have welcomed a rent reduction.

In order to challenge excessive rent or rent increases, private tenants have to overcome many barriers which limit their ability to take their case.

In part 2, we will explore some of the potential reasons why this kind of rent control is under-used and little-known.

  • If you want to find out more about how you would challenge an excessive market rent or rent increase, visit our website for advice.

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