How to Negotiate a Rent Rise with Tenants: A Landlord’s Guide

Raising the rent is a natural part of property management, especially as running costs, taxes and market values shift over time. However, delivering the news of a rent increase to a tenant can be tricky. Indeed, Scotland saw 899 instances of tenants complaining about what they believed to be unfair rent rises in 2024.

A poorly handled rent rise can lead to strained relationships, vacancy risks and even disputes. But with a thoughtful approach, it’s possible to negotiate a rent increase that is fair, justified and mutually agreeable.

Here’s a step-by-step guide for landlords on how to negotiate a rent rise with tenants professionally and effectively.

How to Negotiate a Rent Rise

1. Do Your Research First

Before approaching your tenant, gather the facts. You’ll need to justify your rent increase with clear, market-based reasoning.

Key factors to review:

• Local rental market rates: What are similar properties in your area charging?

• Current rent: How does your tenant’s rate compare to others?

• Inflation and cost of living: Have utility costs, maintenance fees or taxes increased?

• Property upgrades: Have you invested in renovations or improvements that justify higher rent?

Being able to show data helps reinforce the fairness of your proposal and gives the tenant less room for dispute.

2. Know the Legal Requirements

Before you negotiate a rent rise, ensure you are fully compliant with local laws and regulations. In the UK, for example:

• Tenants must receive written notice (typically one month for periodic tenancies, or as stated in the tenancy agreement).

• Rent can usually only be increased once per year unless agreed otherwise.

• You cannot raise the rent during a fixed-term agreement unless a clause in the contract allows it.

It’s important to stick to proper notice periods and procedures, or your tenant may have grounds to challenge the increase.

3. Communicate Early and Clearly

Good communication is essential. Once you’ve made your decision, reach out to your tenant as early as possible. Ideally a few months before the rent change takes effect.

Tips for the conversation:

• Be respectful and calm.

• Explain the reasons behind the increase (such as. rising costs, market alignment, improvements made).

• Acknowledge their loyalty and good tenancy history if applicable.

• Be open to a discussion. Don’t make it a final demand.

This approach sets a cooperative tone and shows that you value the relationship.

4. Offer Context and Flexibility

In some cases, tenants may feel blindsided by an increase. To avoid this, give context for the new rent and, if possible, show flexibility.

Consider:

• Phasing the increase (for example, making two smaller increases over six months rather than one large jump).

• Offering improvements in exchange for the new rate (such as upgraded appliances, repainting or other such renovations).

• Extending the lease at the new rate for longer than the current rental agreement, giving tenants security of tenure.
  

If the tenant understands what they’re getting in return, the rent rise may seem more reasonable.

5. Be Willing to Negotiate

Some tenants may push back and that’s okay. Instead of viewing it as conflict, see it as an opportunity to find a compromise. Being open to offers with the price within reason can help you retain a good tenant, which is usually more cost-effective than finding a new one.

6. Put Everything in Writing

Once you’ve agreed on new terms, document everything clearly. Provide a formal notice or an updated tenancy agreement for both parties to sign. This helps avoid any confusion or disputes down the line and provides legal protection for both you and your tenant.

Help With Tenancies

We can help you negotiate a rent rise and manage the tenancy admin when you outsource your property management to Executive Property Management Solutions. We assist you with issuing paperwork too and collecting fees from your tenants. There is so much more to our services too, so take a look at the packages we have on offer and talk to us today.