Clearly a LL knowing someone’s current level of income could influence their decision in how much they may raise rent. It could actually benefit the tenant as they may not raise to full market value If affordability is affected.
A few hundred quid either way can still be market value, I think most tenants don’t know what a tribunal is and if they do certainly nobody wants the hassle.
I sympathise with the OP to a certain extent, but the LL is clearly within their rights to raise rent to market value. If it’s beyond that, then a tribunal will prohibit it being raised unreasonably. We don’t know enough about the current rent or even if the LL’s motive is to raise rent to make an objective judgement on that.
We’ve both asked, but the OP hasn’t yet told us if she’s asked the LL for the reason behind the check and, if so, what the response was. If she’s been there 5 years, there’s a relationship of trust in place and surely open channels of communication to negotiate a rent amount which is satisfactory to both parties. If not, then there’s more to the story than we know.