If you have been researching rent rules in England, you have probably come across two terms that sound similar but mean very different things: fair rent and market rent. Understanding the distinction matters, because the rules that apply to your property depend on which category your tenancy falls into. The good news is that for the vast majority of landlords, only market rent is relevant.
What Is Fair Rent?
Fair rent is a concept from the Rent Act 1977. It applies to regulated tenancies — a type of tenancy that was common before the Housing Act 1988 introduced the assured shorthold tenancy. Under a regulated tenancy, the rent is set by the Valuation Office Agency (VOA) and registered on a public register. The registered rent is the maximum the landlord can charge. Fair rent is assessed by a rent officer using a formula that considers the condition of the property, its age, character, and locality, but deliberately excludes the effect of scarcity. In other words, the fair rent is calculated as if there were no shortage of rental housing in the area, which typically results in a figure well below the open market rate.
Who Has a Regulated Tenancy?
Regulated tenancies are extremely rare today. They only exist where a tenancy was granted before 15 January 1989, when the Housing Act 1988 came into force. No new regulated tenancies can be created. The number has been declining for decades as long-standing tenants move on. If you bought a property with a sitting tenant whose tenancy predates 1989, you may have a regulated tenancy. Otherwise, it is almost certainly not relevant to you.
What Is Market Rent?
Market rent is the rent a property would achieve on the open market — the amount a willing landlord and a willing tenant would agree on, with both parties acting freely and with full knowledge of the property and the market. Market rent is the standard that applies to all assured tenancies and assured shorthold tenancies under the Housing Act 1988, and it is the standard that the Renters' Rights Act 2025 (c. 26) uses for rent increases from 1 May 2026.
How Market Rent Is Assessed
When you serve a Section 13 notice to increase rent, the proposed figure should reflect the market rent for the property. If the tenant refers the increase to the First-tier Tribunal (Property Chamber), the Tribunal will determine the market rent based on evidence. The Tribunal looks at comparable rental listings and recent lettings for similar properties in the area. It considers the size, type, condition, location, and specification of the property, as well as the terms of the tenancy. The assessment is practical and evidence-based.
Key Differences
The differences between fair rent and market rent are fundamental. Fair rent is set by a rent officer and registered on a public register. Market rent is determined by the open market, or by the Tribunal if there is a dispute. Fair rent deliberately excludes the effect of scarcity, which means it is usually significantly lower than what the property would achieve on the open market. Market rent reflects what the market will actually bear, including supply and demand. Fair rent applies only to regulated tenancies under the Rent Act 1977. Market rent applies to assured tenancies under the Housing Act 1988 and is the standard used under the RRA.
Which One Applies to You?
If your tenancy started on or after 15 January 1989, it is an assured or assured shorthold tenancy and the market rent standard applies. From 1 May 2026, all assured tenancies become periodic under the RRA and rent increases follow the Section 13 process based on market rent. If you are one of the very small number of landlords with a pre-1989 regulated tenancy, the fair rent system still applies and you should seek specialist advice. For everyone else, market rent is the only standard you need to understand.
Why This Matters Under the RRA
The RRA does not introduce rent controls and does not impose a fair rent system on assured tenancies. Landlords remain free to charge market rent. The Act regulates the process by which rent is increased — via Section 13, once per year, with two months' notice, and subject to the tenant's right to challenge at the Tribunal. The Tribunal determines market rent, not fair rent, meaning it looks at real market evidence rather than a formula that ignores scarcity.
Take Action
Use our Rent Increase Calculator to plan your next Section 13 rent increase. Generate your document pack for a compliant Section 13 notice template and a periodic tenancy agreement that reflects the current law. For answers to the most common landlord questions about the RRA, read our Renters' Rights Act FAQ.