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Benefits of a fixed term tenancy
The fixed term offers you a guarantee that the property you rent will offer the same conditions at least until the period ends.
For example, if the landlord wants to increase the rent, they must wait for the fixed term to end, or gain the tenant’s approval and have them sign an additional agreement. The landlord can’t use a Section 21 notice early and end the tenancy before the fixed term has expired.
The fixed term also requires you to rent the property for the entire period. Landlord’s are guaranteed that the tenant will stay and pay rent for at least 12 months.
When the fixed period ends, there are a couple of things that can happen:
- The tenancy is renewed for a new fixed term
- The tenancy automatically rolls into a periodic tenancy
- The landlord or the tenant decides not to continue the tenancy
If your agreement is an assured shorthold tenancy (AST) and you wish to stay in the property after the fixed term, a new written agreement (or ‘renewal’) is not essential. The tenancy becomes a ‘periodic tenancy’ and will continue with the same terms and conditions as before.
The ‘period’ in a periodic tenancy is the same as that for which the rent is payable. For example, where rent is paid monthly, the ‘period’ will normally run from month to month.
This is very common practice and periodic tenancies can, in some cases, continue for many years. However, there are reasons and benefits for renewing the tenancy for another fixed period.
Benefits of a periodic tenancy
Process for ending a periodic tenancy more flexible as there is no extensive ‘fixed’ period to see out and is of particular interest to tenants who move regularly for work commitments. This allows tenants the freedom to look for another property and give notice to the landlord as and when they wish.
It also allows landlords to end the agreement should they wish to renovate or take occupation of the property for other reasons. Provided that the correct legal notice procedures are followed, the landlord or tenant can choose to cease the agreement at any time after the fixed term that suits best suits them.
Reasons for renewal
At the end of the fixed term notice period some tenants prefer to renew the tenancy for another fixed term. The benefit of this is longer term security and knowing each where the other party stands. This is particularly common for families with school aged children where the renewal is a sign of commitment and future planning.
On the other hand, your landlord may ask you to sign a renewal if they want to change the terms of your tenancy agreement. This usually means an increase in rent or an update to comply with new legislation.
If either party wishes to renew there is likely to be a small fee to pay. Many landlords are willing to cover the cost of this in return for a longer tenancy with full occupancy of the property. If you are asked to pay this fee you might like to suggest sharing the cost with the landlord. If your landlord insists on you paying the renewal fee, you should negotiate with them. Remind them how costful finding new tenants is, versus simply covering this fee.
This article is provided as a guide. Any information should be used for research purposes and not as the base for taking legal action. The Tenants' Voice does not provide legal advice and our content does not constitute a client-solicitor relationship.
We advise all tenants to act respectfully with their landlords and letting agents and seek a peaceful resolution to problems with their rented property. For more information, explore the articles in our All advice category.
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