Both landlords and tenants usually look for a fair way to adjust rent. Many use the Consumer Prices Index (CPI) because it links rent hikes to official inflation, not just estimates. Here’s a step-by-step guide on how CPI-based rent increases will work in Great Britain in 2026, including what to check, legal steps, and pitfalls to watch out for. It points to the Office for National Statistics (ONS) for the official CPI figures and to gov.uk for the notice rules landlords must follow.

Quick-reference summary

- CPI source: Office for National Statistics (ONS) — consumer price inflation releases (https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation).
- Legal pages on rent increases (England & Wales): https://www.gov.uk/private-renting/rent-increases.
- Use CPI or CPIH only if the tenancy agreement names it; otherwise follow statutory procedures (Section 13 for periodic tenancies in England & Wales).
- Fixed-term AST: no unilateral increase unless tenant agrees or contract permits. Periodic tenancy: use Section 13 (England & Wales) or local procedure in Scotland/NI.
- Typical calculation: New rent = Current rent × (1 + % CPI change over agreed 12-month period). Example: £1,000 × 1.045 = £1,045 for a 4.5% CPI rise.

Prerequisites

Before trying to apply a CPI-linked increase, confirm three things.

1. Tenancy type. If the tenancy is a fixed-term assured shorthold tenancy (AST) in England or Wales, the rent can't be increased unilaterally during the fixed term unless the contract includes a rent review clause or the tenant agrees in writing. For periodic tenancies, statutory routes exist.

2. Contract wording.

Look for a rent review clause. A properly drafted clause will say which index to use (for example, "CPI, ONS all-items, 12-month change, published in month X"), the reference month, any cap or floor, and the review date or formula.

3. Source and reference period. If you plan to use CPI, specify which CPI variant (ONS CPI or CPIH) and the 12‑month comparison period — for example, "the 12 months to March 2026 measured by ONS CPI". The ONS site lists exact monthly figures and the release calendar.

Mastheads

Step-by-step: How to calculate and apply a CPI rent increase

Use these steps to apply a CPI-based rent increase properly and legally.

  1. Decide the legal route. If there's a lease clause, follow it. If not, and the tenancy is periodic in England and Wales, use the statutory notice (Section 13 Housing Act 1988). For Scotland, use the Rent Increase Notice and procedures via the First-tier Tribunal for Scotland; in Northern Ireland check local rules and the Private Tenancies Branch guidance.
  2. Pick the index and reference months. Use the ONS CPI release as the source. Example wording: "The Consumer Prices Index (CPI) published by the Office for National Statistics for the 12 months to March 2026." Put the exact ONS URL in the lease if possible (https://www.ons.gov.uk/economy/inflationandpriceindices).
  3. Get the figures from ONS. Find the published CPI value for the reference month a year earlier and the current reference month. The ONS bulletins give the 12-month percentage change; use that percentage. Record the release date for audit trails (ONS releases usually arrive monthly — check the release calendar on the ONS site).
  4. Calculate the increase. Multiply the current rent by (1 + CPI change as a decimal). Example: Current rent £1,000; CPI 12-month change 4.5% → new rent = £1,000 × 1.045 = £1,045. If the clause specifies rounding (e.g. To the nearest £5), apply that rounding rule.
  5. Apply caps/floors if the lease says so. Many clauses include a cap (maximum increase) or floor (minimum). If the CPI change exceeds the cap, use the cap instead. Example: CPI 6.0% but clause caps at 3.0% → increase = 3.0%.
  6. Serve the correct notice. For periodic tenancies in England & Wales, serve a Section 13 notice using the prescribed form or compliant letter and allow the statutory notice period (usually one rental period or a minimum of one month for monthly tenancies; check gov.uk for current notice lengths). For contractual rent reviews, follow the notice requirements in the clause (often 28 or 56 days’ notice). Always send proof of service (recorded delivery or email with read receipt).
  7. Keep documentary evidence. Attach a printout or screenshot of the ONS CPI bulletin showing the 12-month change, the calculation, and the lease clause reference so the tenant can verify the method.
  8. If disputed, follow tribunal or court routes. If the tenant objects, the dispute is usually resolved by a tribunal (First-tier Tribunal in England & Wales for some disputes, or county court). Present the lease wording, the ONS figures, and the calculation. If a clause is poorly drafted, tribunals will interpret it purposively but may not rewrite unclear clauses.

Costs, fees and eligibility

Checking CPI figures on the ONS website doesn’t cost anything. Serving a rent increase notice usually costs only postage or time. Where costs arise is when a dispute goes to tribunal or court — fees and hearing costs vary by route and can change over time.

Legal advice or agents’ fees are optional but commonly used for complex commercial leases.

Eligibility: this method only applies if the tenancy type and the lease permit it. Commercial leases frequently contain CPI-linked rent reviews; private residential tenancies need clear wording or statutory procedure.

Tips for drafting a clear CPI clause

- Name the index and the data source precisely: "CPI (All Items), Office for National Statistics, 12-month percentage change" and include the ONS URL.
- Specify the reference month for each review and the release to use (eg, "CPI for the 12 months to March, as published in the ONS bulletin released in April").
- Include rounding, caps/floors, and an example calculation.
- For long leases, specify whether increases compound annually or are non‑compounding.
- State the notice period and how notice is served (post, email, etc.).

Alternatives and comparisons

- CPI vs CPIH: CPIH includes owner-occupiers’ housing costs; many contracts prefer CPIH for broader coverage. Decide which better matches the asset’s cost profile.
- CPI vs RPI: RPI tends to be higher than CPI and isn't a National Statistic; avoid RPI for new contracts unless both parties accept it. ONS stopped endorsing RPI as a National Statistic in earlier years, so verify your reasons for using it.
- Fixed percentage increases: simpler to administer but can under- or over-compensate during volatile inflation.
- Market rent reviews: some commercial leases tie rent to open market rent determined by a valuer rather than an index.

Common mistakes to avoid

- Using the wrong index. Be explicit — "CPI" means the ONS measure; don’t use a private inflation tracker unless named in the lease.
- Misreading the reference period. The lease may call for the 12 months to a specific month — use the exact months ONS used.
- Forgetting tenancy type. Attempting a unilateral increase in a fixed-term AST without a clause will fail.
- Not serving the correct notice or not keeping proof of service.
- Ignoring caps, floors and rounding rules in the clause.
- Assuming CPI alone covers all cost rises — some landlords hedge by combining CPI with a fixed sum to cover specific cost pressures like business rates or service charges.

If a tenant objects

Right now, encourage negotiation first. If the tenant contests a statutory rent increase in England and Wales, they can refer the matter to the First-tier Tribunal (Property Chamber) for a determination of a fair rent if applicable. The tribunal will inspect the lease wording and the CPI evidence. Keep all documents tidy: lease, CPI bulletin, calculation, notice and proof of service.

Where to get official figures and guidance

- ONS consumer price inflation pages: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation — check the monthly release and the CPI time series for precise percentage changes and tables.
- gov.uk private renting guidance on rent increases: https://www.gov.uk/private-renting/rent-increases — for the formal process, notice periods and tenant rights in England and Wales.
- Shelter and Citizens Advice offer plain-language guidance and sample letters: https://www.shelter.org.uk and https://www.citizensadvice.org.uk.

Related Articles

Using CPI for rent increases gives an objective, reputable basis for adjusting rent — but only if the tenancy and the paperwork allow it. Name the index, fix the reference months, do the maths transparently and serve the correct notice. Keep ONS bulletins and the lease clause to hand; if the tenant objects, tribunals look first at the contract wording and then at the evidence from ONS.

This article was created with AI assistance.