Your rights if the landlord sells up
Because Derek, the landlord, was selling their home, Lily and Conor didn’t sign the tenancy agreement he sent them last June. They wanted to stay in their flat but didn’t see how Derek could renew a 12-month contract when the sale was in progress. That was a mistake. Renewing their tenancy would have guaranteed their rent and security of tenure for a year. But as they chose not to sign, the couple’s tenancy rolled over into a periodic contract in August.
In December, the new owner served Lily and Conor with notice of a proposed rent increase; ‘a section 13 notice’. Last week, Lily contacted Renters’ Rights London to ask how this could be legal as she and Conor have no agreement with the new owner? The answer is simple; because a tenancy is created through practice, not paperwork. A tenancy is effected when you start paying rent and live at an address. This is nothing new. It’s from Section 54(2) of The Law of Property Act 1925. Lily and Conor have had a contractual relationship with the new owner, the current landlord, for months.
In a periodic tenancy, a landlord can raise the rent once in any 12-month period, by serving “a section 13 notice” on Form 4. If the rent proposed looks too high, you can challenge it through the First-tier Tribunal. The Tribunal will decide what rent the landlord could expect if the tenancy were offered to the market. They take the condition of the property into account, as well as the location. The Tribunal can order that the rent remains unchanged, be increased by a different amount or be reduced. Today, the Tribunal might decide that the rent can be increased by even more than the landlord wanted but when the Renters’ Rights Bill becomes law, this will change. Thereafter, the sum the landlord requests will be the maximum allowed.
Lily and Conor should have acted much faster if they wanted to lodge a challenge, though. Any application must be lodged before the start date of the proposed new rent. And in fact, Lily said that the new rent still costs a bit less than other garden flats in the neighbourhood.
They paid the old rent this month but should be prepared to pay the new, higher rent from 1st March. Also, to try to pay off the rent arrears they have now accrued. It’s not going to be at all easy. The new rent will take half of their joint income. Now, Lily really regrets not having signed the renewal contract Derek offered last Summer.
Counting the Cost
While rents rise like helium, Local Housing Allowance [LHA] rates are capped. Although nearly 15% of private renting households are entitled to the benefit, just 5% of private rental listings are within LHA levels. This goes some way to explaining why Londoners are experiencing homelessness at the highest level ever recorded.
Although rough sleeping has also spiralled in the past 10 years, many more people who can’t secure a tenancy are living in temporary accommodation [TA] arranged by their local council. The number of Londoners in temporary accommodation includes nearly 90,000 children. That’s one in every 21 of our children.
If you’ve experienced homelessness, you’ll know how grim life in TA can be. Living in TA has horribly negative effects on the physical, social and emotional health of everyone. Temporary housing is often of poor quality; cramped, with shared bathrooms, inadequate cooking facilities and nowhere to play. As part of the 4-in-10 Network, Renters’ Rights London supports the Magpie Project campaign for legislative change. We must end the use of hotels with no kitchens to house families with children. Please lend your support by signing the petition?
London Councils and JRF are just two of many who called for a Budget commitment to uplift LHA rates in line with market rents each year. But it seems entirely possible that this approach would just embolden landlords to hike rents even higher.
Between 12 July to 1 October 2023, renters were more likely to report an increase in their rent than mortgage holders in their mortgage payments (55% and 34%). This proportion appears to have increased among renters compared with earlier in the year, but not among mortgage holders (42% and 32%, respectively, from 8 February to 10 May 2023). All these figures come from the Office for National Statistics (ONS).
The latest show that rents around UK are still rising faster than wages. London had the highest annual rents inflation of any region in the 12 months to March 2024, at 6.9%. Even without any annual uplift, NEF has worked out that government payments to private landlords come to more than £70 billion in the five-years from 2021 to 2026. That’s a generous transfer of wealth from the public purse to buy more homes for people who already own a home of their own.
Likewise, the wild cost of TA. Every day, London boroughs collectively spend nearly £4 million on temporary accommodation. It’s a vicious cycle where local authorities are forced to allocate more resources to short-term measures than to investing in the decent, affordable homes we need so urgently.
The Black Equity Organisation has launched The Rental Discrimination Clinic. Run in partnership with King’s Legal Clinic, the Clinic supports people denied the opportunity to rent or view a property due to
- Receiving DWP benefits
- Being disabled
- Having children
Rental bias disproportionately impacts Black renters. If you’ve faced this, please reach out: or click on the image, above.
Better news
Early in what this Labour government hopes will be ‘a decade of national renewal’, they’ve introduced a welcome change in legislation. The English Devolution White Paper empowers councils to implement larger property licensing schemes, as needed. After 2015, councils had to seek authorisation from the Secretary of State for any licensing scheme across more than 20% of the borough.
The London Borough of Redbridge was the first to apply under the now-historic rules. When their proposal for borough-wide property licensing was refused by Greg Clark (then-Secretary of State for Communities and Local Government), other councils learnt that the bar was set high. Making the case for property licensing became a lengthy and expensive process. Councils struggle to meet the high costs of essential services like education, social care and temporary accommodation. Not every council that should have introduced more property licensing could do so, then.
But that’s all in the past. It’s really good to see national government devolving some powers in relation to housing. We hope for more to come. Local government is best-placed to identify local needs.
Of course, property licensing is a means to an end, not an end in itself. But where licensing is diligently administered and backed by an inspection regime, schemes serve to protect renters’ health and well-being.
‘What makes it hard to buy a home?’
Centre for Progressive Change are developing a campaign on progressive home ownership, beginning this work with a listening campaign to hear from people across the UK. They want to find out what barriers people are facing, and what they feel needs to change – from small tweaks to a housing system revamp.
In particular, they would like to learn about your experiences of hoping to—or trying to—buy a home. If you would like to participate in the research phase of this work, please respond to this Centre for Progressive Change survey What makes it hard to buy a home?