I'm considering entering into a tenancy agreement as a private tenant for a house; this is quite a high value rental, around the top 1% of the market. I have not yet paid over the holding deposit, having requested a specimen tenancy agreement first.
I am concerned by the following clause:
After the first 12 months of this Agreement has passed, the rent shall be increased with such increase to be in line with the Retail Price Index (RPI) for the 12 months immediately preceding the increase with a minimum increase of 3% and a maximum increase of 8%. Thereafter once the fixed term of the Agreement has expired, if the tenancy rolls over into a periodic Agreement, the rent will continue to be increased on a yearly basis in line with the RPI for the preceding 12 months with a minimum increase of 3% and a maximum increase of 8%.
I've never seen a clause like this in any other tenancy agreement. On the scale of value of the property I'm looking at, between 3% and 8% is a significant amount of money.
My biggest concern is that RPI has been lower than 3% since 2012, so any rent increase would be governed by this arbitrary minimum of 3% - and preferably, I would have no mandatory rent increase at all in the lease.
I queried the clause with the letting agent, suggesting it be replaced with wording to the effect of "The Landlord can review and increase the Rent every twelve months on the anniversary of the date on which the Tenancy began." The landlord came back with:
This RPI clause cannot be changed, any rent increase must be tagged to this index for fairness. Any rent increase must be agreed with yourselves prior to enacting in any case.
Should I be worried about this clause? Should I continue to argue for its removal? Is this a reasonable thing to see in a tenancy agreement at all?
I'm based in the UK (greater London).