Context: United Kingdom, South-East, West of London
I have made an offer for a rental property: 2 year tenancy with a 6 month break clause at £XXX/month. This offer was accepted and I paid a holding deposit of ~£200 to the rental agency.
I have just received the proposed tenancy agreement (which I haven't signed yet), running from 15th November 2019 to 14th November 2021, and I am baffled to see the following clause:
The rent will increase to £YYY per calendar month with effect from 5 November 2020 and by 5% per annum thereafter.
In other words, they want to increase the rent by 5% every year starting midway through the tenancy.
My thoughts are:
- The accepted offer was for 2 years at the offered rent, and although we did not state it explicitly, we assumed the rent would be fixed for the duration of the tenancy!
- 5% seems arbitrary and quite generous, given that annual inflation in the UK has been between 1 and 3% for several years.
My questions (edited):
Is there a reason why the agency is asking for 5% in particular. Is it reasonable? Is there a standard for annual rent increase in the UK?
Am I correct to assume that the offer was for a fixed rent, even though not explicitly stated?
If the agency does not bulge, I am prepared to walk away. The holding deposit is advertised as "non-refundable", however in that case I consider that the proposed tenancy agreement is not in line with the accepted offer, so I would expect to be refunded anyway. Is that reasonable? If they refuse to refund me, is there a higher authority or ombudsman I can turn to?
I will of course contact the agency and negotiate, but I wanted to know my options first.