HMRC Valuation Office to decide challenges to rent increases

The government has announced that HMRC's Valuation Office will become responsible for decisions on challenges to rent increases in England.

A quick recap...

In summary, if a landlord of an assured periodic tenancy (APT) wishes to increase the rent for an existing tenant:

• The landlord may only increase the rent "annually".
• The tenant has the right to challenge the proposed increase (within 2 months of receiving the landlord's notice proposing the increase).
• If the tenant challenges, then the rent will be determined by the First Tier Tribunal (FTT). The FTT will decide the open market rent.
• The open market rent determined by the FTT will usually become payable from the next rent payment date after the FTT's decision – it will not be backdated but the increase could be deferred up to two months further if the tenant successfully claims undue hardship.
• There is no set period for the FTT to make its decision.
• The next annual rent increase permitted will run from the date of the FTT's decision, so there is a potential for compounded delays.

A tenant can also challenge the initial rent in the first six months of the tenancy.

On 9 September alongside a government announcement that a regional rollout of the landlord registration service for the Private Rented Sector (PRS) database in England will start in December 2026 the government also announced that HMRC's Valuation Office will become responsible for decisions on challenges to rent increases in England.

The government has not confirmed a date for this change which is likely to require legislation to implement. Until then applications should continue to be made to the FTT.

There has been a lot of commentary on the ability of the FTT to cope with a predicted increase in the number of applications in relation to rent challenges following the Renters' Right Act 2025 coming into force. The government has previously indicated it may use an 'alternative body or mechanism to make initial rent determinations' so the announcement is perhaps not a complete surprise.

However, it will be interesting to see whether the valuation office has the same remit as the FTT and the extent to which it will speed up and relieve pressure on the system.