Rent rises of up to 88% still passing in England despite Renters’ Reform Act

Exclusive: While tenants are challenging increases in record numbers, renters and landlords say system is ‘not working for anyone’

The rent tribunal system is “not working for anyone”, tenants and landlords have said, as rent increases of up to 88% continue to be approved despite Labour’s pledge to curb unfair rises.

Tenants are challenging rent increases in record numbers since the Renters’ Reform Act came into effect in May, making the process easier and less risky for renters.

But tenants and landlords have said people are facing increasingly long delays for hearings, and that there is a lack of consistency in how “fair market rent” is being decided.

Analysis of data from May to October by London Renters Union (LRU) showed 80% of tenants who went through the tribunal process saw their rent go up, by an average of £1,200 a year, although in most cases it was less than the landlord’s proposed increase.

In 36% of cases, the landlord’s proposed increase was approved in full, and in 42% of cases the rent increase was reduced. In 16% of cases the rent increase was cancelled, and in 6% rent was lowered.

In one case, a rent tribunal approved an 88% rent increase on a property in Dagenham. The tenant, who paid rent via housing benefit, argued the increase would lead to undue hardship but his monthly rent still went up from £1,200 to £2,250.

In another case, a tenant who challenged a £17-a-month rent increase received a £200 rent decrease after the tribunal ruled the rent was actually too high.

Tenants’ unions have expressed concern over rent increases of 30% or more being regularly approved.

Jae Vail from LRU said: “The system is just clearly not doing what Labour said it would do in their manifesto, which was helping people challenge unreasonable rent increases. What could be a better definition of an unreasonable rent increase than 40% or 80%?

“And in places where rents in an entire area are rising really rapidly, this doesn’t protect you because it’s quite hard to evidence this is actually out of character.”

He added that renters were starting to face long delays to have their cases heard, and that tenants in London had been asked to attend hearings in the Midlands due to backlogs.

The changes, which took effect in May, mean the tribunal can no longer increase rent higher than the landlord’s application, and rent increases can no longer be backdated to before the tribunal decision. The abolition of “no fault” evictions also reduced the risk of landlords retaliating against tenants. The cost of applying is £47.

Chris Norris, chief policy officer at the National Residential Landlords Association, said the system “wasn’t working for anyone” and there were concerns that inaccurate decisions were being made by an overstretched workforce.

“It’s very difficult for landlords to trust and have faith in the system,” he said. “There hasn’t been any more capacity or resource put into the tribunal system by the government to make sure this works, and only just over 30 [full-time] judges across the country are working on this.

“We’ve seen judgments based pretty much exclusively on a trawl of Rightmove or similar sites, which is not that helpful.”

He also said there were concerns tenants’ unions were encouraging members to challenge all rent increases, which he described as an “abuse of the system”.

Oxford Renters Union has asked its members to pledge to say no to rent increases by taking them to tribunal, with the goal of “freezing rents and lowering the market rate for all Oxford renters”.

“We need to make sure bad landlords don’t try to replicate no-fault evictions by using rent increases. It’s absolutely essential,” Norris said. “But unfortunately, it stops serving that purpose if you deliberately try to gum up the system.”

But unions pushed back on this, saying there was no evidence to suggest renters were “flooding the system”.

Nye Jones from Generation Rent said the tribunal system had been working well since May but further change was needed. “It is based on what’s deemed a fair market rent in the current market. But we know that in many places, renters are already paying way, way more than they can afford on rent. We need to look at how we can reduce the relative cost of rent over time,” he said.

Renters’ groups are calling on the government to set controls on rent increases across the country to make renting more affordable while housing stock steadily increases.

Vail said: “What we’re seeing right now is a really inefficient case-by-case form of rent control. So why not have the version that would actually protect everyone?”

A spokesperson for the Ministry of Housing, Communities and Local Government said: “Our Renters’ Rights Act empowers tenants to challenge above-market rent increases through the tribunal – stopping private landlords from using increases as a backdoor means of eviction.

“We’re already seeing evidence that our changes are working – with cases across the country where tribunals have reduced above-market rents by hundreds of pounds a month or ruled there should be no increase.”