What is a fixed-term tenancy?
You might know it as an AST or assured shorthold tenancy agreement, a fixed-term tenancy is a rental agreement that runs for a set period (commonly 6 or 12 months) and ends on a specified date. Under the previous system, a landlord could plan around that end date, for example, by deciding to sell or take back the property, and tenants knew exactly when their agreement would end. At the end of the fixed term the tenancy normally ended automatically unless renewed, and landlords could use a Section 21 “no-fault” notice to regain possession at that point.
In practice, fixed-term assured shorthold tenancies (ASTs) gave both parties certainty: tenants had security of tenure for the agreed period, and landlords had a clear schedule of when they could regain possession. However, this position is changing under the Renters Rights Act.
How do fixed-term tenancies work now?
Under the current system (prior to the Renters Rights Act coming fully into force), during the fixed term tenants must pay rent and cannot usually leave early without penalty unless there’s a break clause. Landlords typically cannot force a tenant out in the middle of a fixed term except for serious breaches (using Section 8 court grounds).
At the end of the term, a Section 21 notice can currently be used to ask tenants to leave without giving any reason (subject to notice requirements). If neither party renews or ends the tenancy, the fixed-term often rolls into a periodic tenancy (a month-to-month arrangement under the same terms) once the term expires.
The Renters Rights Act: From Fixed-Term to Periodic
The Renters Rights Act introduces a major shift in how tenancies operate in England. Under the Act, fixed-term tenancies will be abolished. Once the relevant provisions take effect, all new and existing assured shorthold tenancies will become assured periodic tenancies.
In a periodic tenancy there is no fixed end date. Instead, the agreement continues indefinitely until one side gives notice to end it. Most periodic tenancies will run month-to-month (or week-to-week if rent is paid weekly).
In practical terms, this means a tenancy that was originally granted for 12 months will simply become a rolling monthly tenancy (with the same day-to-day terms) when the Act takes effect. As the government guidance explains, fixed-term tenancies will be removed and replaced with a single system of periodic tenancies. This change is intended to give tenants more flexibility, allowing them to move on without waiting for a lease to end, but it also removes the automatic end-dates that landlords have traditionally relied on.
What does this mean for landlords?
For landlords, the removal of fixed terms means no more automatic end-dates or “no-fault” evictions. Key implications include:
- Loss of an automatic end-date:
You will no longer be able to set a date in advance when the tenancy simply ends. A tenancy will continue indefinitely until notice is given. This means you can’t rely on a lease expiring to regain possession or to move in or sell the property.
- Abolition of Section 21 “no-fault” notices:
The Renters Rights Act abolishes Section 21 evictions. Landlords will no longer be able to end a tenancy without giving a reason. Instead, possession must be sought using the formal legal grounds (reformed Section 8 grounds) through the courts.
- Expanded and strengthened grounds for possession:
To balance this change, the Act introduces new and strengthened grounds for repossession. These include new mandatory grounds for selling the property or moving in yourself (subject to qualifying conditions), as well as strengthened grounds for serious rent arrears and antisocial behaviour. While landlords must now provide a valid reason for eviction, the law has been updated to better reflect common landlord scenarios.
- Tenant notice periods:
Tenants will gain greater flexibility to leave. Under the new rules, tenants will be required to give two months’ notice to end a periodic tenancy. This extended notice period is designed to give landlords more time to plan and find replacement tenants.
- Rent increases:
Without fixed terms, landlords must use the statutory Section 13 rent increase process. Rent can generally only be increased once per year, with at least two months’ notice, and must reflect market value. Tenants will have the right to challenge excessive increases via a tribunal. Automatic rent review clauses will no longer apply in the same way.
Overall, landlords lose the certainty of fixed end-dates but gain a clearer, more consistent framework. The government’s position is that periodic tenancies provide greater security for tenants while giving landlords clearer and more robust possession grounds under a simpler system.
It’s natural to worry about losing control, but many landlord concerns have been recognised in the final Act. For example, the risk of tenants leaving suddenly is reduced by the longer two-month notice period, and the possession grounds have been expanded to ensure landlords can regain their property when there is a legitimate need to do so.
How letting agents can help
As letting agents, we’re here to guide you through the transition and make it as smooth as possible. Our support can include:
- Updating tenancy agreements:
We will update your agreements and documentation to reflect the move from fixed-term to periodic tenancies, including revised notice periods and rent increase procedures.
- Explaining possession grounds:
We can advise you on the updated legal grounds for possession, helping you understand what reasons are valid and how to prepare the correct paperwork if court action is required.
- Managing notices:
We’ll handle the service of correct notices, including tenant notices and landlord Section 8 notices, ensuring compliance with the new legal requirements.
- Tenant communications:
We can communicate clearly with tenants about how their existing tenancy will transition to a periodic arrangement and what this means for both parties.
- Rent review support:
We will guide you through the Section 13 rent increase process to help keep rents aligned with the market while remaining compliant.
- Ongoing property management:
All other core responsibilities remain unchanged, including maintenance, rent collection, compliance, deposit protection and inspections.
In short, as letting agents, we will be key partners in navigating the changes introduced by the Renters Rights Act. We stay up to date with implementation timelines and regulations and can interpret how they apply to your property. Our goal is to minimise disruption, protect your investment, and keep your property compliant and occupied.
If you have any questions or need support navigating these changes, feel free to get in touch with us by emailing lettings@anthonyquirk.com or calling 01268 511311.