How to Calculate a Fair Rent Increase as a Landlord: A Defensible Method for 2026

Under the Renters' Rights Act 2025, every rent increase in England now runs through the Section 13 process, and every Section 13 notice can be challenged at the First-tier Tribunal. The tribunal has one job: decide what rent the property would achieve on the open market today. If your number is defensible against that test, you keep it. If it isn't, the tribunal sets a lower rent — and under the new rules, it cannot set a higher one than you asked for. So the question every landlord now needs to answer before serving Form 4A is: how do I work out a number I can actually justify?

TL;DR — How to calculate a defensible rent increase

Anchor your figure to open-market rent, not to your costs. The First-tier Tribunal's statutory test under section 14 of the Housing Act 1988 (as amended by the Renters' Rights Act 2025) is what a willing landlord could achieve on a fresh open-market letting today. Build a short list of 3–6 genuinely comparable properties (same area, size, condition, EPC band), prefer agreed lets over asking prices, adjust down for any condition gap, and pick a number you can evidence on one A4 page. Serve Form 4A with at least two months' notice, no more than once every 12 months.

What does the tribunal actually decide?

The tribunal does not decide whether your increase is reasonable, fair or affordable. It decides what rent the property would command "if let in the open market by a willing landlord under an assured tenancy" on the same terms — that is the statutory test in section 14, reproduced in dozens of published tribunal decisions on GOV.UK's tribunal decisions database.

That distinction matters. Your mortgage going up does not move the number. The 8% the property next door agreed last month does. The tribunal is essentially acting as an expert valuer, and it will reach a figure using its own market knowledge plus the comparable evidence the parties put in front of it.

Why the new rules change your calculation

Under the pre-2026 regime, a tenant who challenged a rent increase risked the tribunal setting a higher rent than the landlord proposed. That risk discouraged challenges. The Renters' Rights Act has stripped that risk out and added two more changes that all push in the same direction — challenges are now low-cost and low-risk for tenants, and high-cost for landlords who overreach:

Source: GOV.UK — Renters' Rights Act overview for landlords and GOV.UK — apply for an open market rent determination.

The practical implication: a chancer figure no longer pays. If you propose £1,400 and the tribunal decides the market is £1,250, you don't get £1,400 — and you don't get the back-dated £1,250 from the notice date either.

Your Form 4A figure is now the ceiling, never the floor. Pitch it where the evidence supports it, not where you wish the market was.

How do I find the open-market rent for my property?

The tribunal itself sets out the evidence hierarchy in its application guidance. In descending order of weight (GOV.UK guidance):

1. Agreed lettings — actual rents on actual signed tenancies for similar nearby properties. Strongest evidence.
2. Letting agent and portal listings (Rightmove, Zoopla) — useful, but these are asking prices, not achieved prices, and the tribunal knows it.
3. Housing association rents, previous fair-rent decisions, Local Housing Allowance rates — weakest evidence, and largely irrelevant.

A solid comparables bundle looks like this:

• 3–6 properties within roughly half a mile (or the same town for rural areas)
• Same number of bedrooms and broadly similar size
• Similar EPC band, heating type and condition
• Lets agreed in the last 6 months ideally, no older than 12
• Screenshots dated, with the address (or close approximation) and agent name

If you can't find achieved-let evidence, two or three current portal listings plus a note of what they actually let for (your agent contacts will tell you) is a reasonable substitute. Do not lean on a single comparable — one is anecdote, three is a pattern.

Worked example 1: a 3-bed terrace in Lancashire

Say Dave has a 3-bed mid-terrace in a Lancashire mill town. Current rent: £775 pcm, last increased in June 2025. Decent condition, gas central heating, EPC D, new bathroom in 2023.

He pulls comparables for the same postcode sector:

The like-for-like cluster (3-bed, EPC D, similar condition) sits at £825–£850. The £900 outlier has a newer kitchen and a C rating — Dave's property doesn't, so that's a ceiling not a target. The 2-bed at £750 is informative but not directly comparable.

Dave's defensible number is around £840 pcm — a 8.4% increase. He could go to £850 with a straight face given the bathroom refurbishment. He should not go to £875 just because the North-East regional rent inflation figure from the ONS Price Index of Private Rents (6.5% in the 12 months to April 2026) implies that's where the market "should" be — the local comparables are the evidence that actually counts.

Worked example 2: a tired 2-bed flat in outer London

Say a landlord has a 2-bed flat in Zone 4, last decorated 2018, EPC D, no off-street parking, electric heating. Current rent: £1,400 pcm. Local 2-beds are listed at £1,650–£1,750.

The landlord wants to go to £1,650. But two of those listings have been refurbished and are EPC C; one has a modern combi-boiler the flat doesn't have; one has a parking space. The achieved-let evidence for like-for-like dated stock is closer to £1,500–£1,550.

A defensible number is £1,525, not £1,650. Pitching at £1,650 invites a tribunal challenge that, on this evidence, the landlord would probably lose — and the new rent then only takes effect from the determination date, costing several months of uplift. The London ONS figure of 2.0% annual rent inflation reinforces the point: this is a slow-moving local market.

What about my costs, mortgage, or inflation?

Blunt answer: legally, none of it matters to the tribunal. The market rent is the market rent. CPI, your interest rate, your insurance premium, your boiler replacement — none of that features in section 14.

That said, cost pressures do shape whether an increase is worth pursuing at all. If your costs have risen 12% but the local market has only moved 3%, a Section 13 won't close the gap. The honest options at that point are to absorb the gap, improve the property to push it into a higher rental band (an EPC C upgrade is the obvious lever — see our guide to energy efficiency improvements), or re-let.

The Section 13 mechanics, in one place

1. Check the 12-month rule. You cannot increase rent more than once every 12 months, and not at all in the first year of the tenancy (GOV.UK rent increases guidance).
2. Build your comparables bundle — 3–6 like-for-like properties with dated screenshots, ideally agreed lets not asking prices.
3. Adjust honestly for condition, EPC and amenities. If your property is below the comparables on any of these, your number should be too.
4. Serve Form 4A with at least 2 months' notice. The form is published on GOV.UK and is the only valid mechanism — rent review clauses no longer work.
5. Keep the evidence file. If the tenant applies to the tribunal, you'll need to submit it. The decision is often made on the papers alone.

For the wider context on serving Form 4A and timing, see our piece on the new Section 13 rent increase notice rules, and our first-tier tribunal preparation guide if a challenge looks likely.

A reality check on what tribunals actually do

Published tribunal decisions show a consistent pattern: the panel sets a "good condition" market rent based on comparables, then adjusts down for any condition shortfall in the subject property — outdated kitchens, tired decor, missing white goods, poor EPC. In one 2023 Sheffield decision, the tribunal pegged a good-condition market rent at £1,600 pcm and then reduced it because the property fell short of "modern letting" standard (tribunal decision, 5 Alms Hill Glade).

For the landlord, the lesson is to do that adjustment yourself, before serving notice. Walk the property with a critical eye. Better still, walk one of your comparables — if your kitchen, bathroom and decor are visibly behind, your defensible number is below theirs.

Frequently Asked Questions

How much can I increase rent by under the Renters' Rights Act?

There is no percentage cap. You can propose any figure up to the open-market rent for the property, but the tenant can challenge it at the First-tier Tribunal if they believe it exceeds market rate (GOV.UK overview). The tribunal then sets the rent — capped at your proposed figure, never above it.

Can I still use a rent review clause in the tenancy agreement?

No. From 1 May 2026, rent review clauses in assured periodic tenancies are not enforceable. The Section 13 process using Form 4A is the only valid mechanism, even if you have already informally agreed an increase with the tenant (GOV.UK rent increases guidance).

How often can I increase the rent?

Once every 12 months, and not at all in the first 12 months of the tenancy. You must give the tenant at least two months' written notice using Form 4A before the new rent takes effect.

What evidence does the tribunal want to see?

Comparable lettings — ideally agreed lets on similar nearby properties of the same size, condition and EPC band. Letting agent and portal data (Rightmove, Zoopla) is acceptable but treated as weaker than achieved rents. Housing association rents and Local Housing Allowance rates carry little weight (GOV.UK tribunal application guidance).

What happens if the tenant challenges the increase?

The tenant applies to the First-tier Tribunal (Property Chamber) for £47 before the new rent's start date. The tribunal decides the open-market rent on the papers or at a short hearing. If your figure is at or below market, it stands. If above, the tribunal sets a lower figure — applied from the determination date, not your notice date, with a possible further deferral of up to 2 months for tenant hardship.

Should I just propose the maximum to leave room to negotiate?

No. Under the new rules the tribunal cannot increase above your proposed figure, so there is no upside to overstating — but there is a real downside. An indefensible Form 4A figure invites a challenge, costs you months of uplift even if you eventually "win" a reasonable number, and damages the working relationship with the tenant. Pitch where the evidence sits.

This article is general guidance, not legal advice. For a contested or high-value increase, consider taking advice from a housing solicitor or RICS-qualified valuer before serving notice.