Assured periodic tenancy

Why it matters

The shift changes how tenancies begin, end, and are priced. Landlords lose the certainty of a fixed term and the ability to end a tenancy without a reason; tenants gain flexibility and the right to leave on two months notice at any point. Every template, process and cash-flow assumption built around a twelve-month fixed term needs revisiting.

Legal requirements

• Rent periods may not exceed one month, so weekly, fortnightly and monthly tenancies are permitted but quarterly and annual periods are not.
• A tenant may end the tenancy by giving two months notice, expiring at the end of a rent period.
• A landlord may only end the tenancy using a ground in Schedule 2 to the Housing Act 1988 as amended, with the notice period fixed by the ground relied on.
• Section 21 no-fault possession is abolished; possession requires a ground and, if contested, a court order.
• Rent may only be increased once in any twelve-month period, by a statutory notice, with the tenant able to challenge the proposed rent at the First-tier Tribunal.
• Rent in advance beyond the first period and bidding above the advertised rent are restricted.

Common mistakes

• Continuing to issue twelve-month fixed-term agreements and assuming the term is enforceable.
• Relying on a contractual rent review clause instead of the statutory notice.
• Serving a notice with an expiry date that does not align with the end of a rent period.
• Keeping a blanket no pets clause in the template.
• Assuming the deposit and prescribed information do not need reviewing when the tenancy form changes.

Practical guidance

• Rewrite your standard agreement now rather than at the next letting.
• Rebuild cash-flow forecasts on the assumption a tenant can leave on two months notice.
• Diarise the twelve-month rent review cycle per tenancy so the annual increase is not missed.
• Keep a documented record of service for every notice — date, method and proof.

How a periodic tenancy actually operates

The tenancy continues indefinitely, period by period, on the same terms until either party brings it to an end lawfully. There is no renewal event, so there is no natural point at which to re-paper the tenancy — which makes it more important that the original agreement is complete and correct. Deposit protection continues, but the prescribed information must stay accurate. Guarantor agreements need to be drafted to survive the move to a periodic tenancy rather than lapsing with a fixed term.

Ending it as a landlord

You need a ground. The reformed grounds include sale of the property and occupation by the landlord or a close family member, each with a qualifying period from the start of the tenancy and a restriction on re-letting afterwards, along with rent arrears, anti-social behaviour, breach of tenancy and the redevelopment grounds. Notice periods vary by ground and the notice must be in the prescribed form with the correct expiry date. A defective notice is the most common reason a possession claim fails.

Ending it as a tenant

The tenant gives two months notice in writing expiring at the end of a rent period. There is no minimum stay expressed as a fixed term, so in principle a tenant can serve notice early in the tenancy — this is the single biggest commercial change for landlords, particularly in student and short-stay markets where the fixed term underpinned the letting cycle.

Rent increases

Increases run through the statutory notice route only, once every twelve months, with at least the prescribed notice period before the new rent takes effect. Rent review clauses in the agreement no longer bite. A tenant who thinks the proposed rent exceeds the market rate can refer it to the First-tier Tribunal before it takes effect, and the tribunal cannot set a rent above the amount proposed.

What to change in your paperwork

Remove fixed-term and break-clause wording, remove contractual rent review clauses, check that the guarantor deed continues for the whole tenancy, make sure the agreement is silent on anything the Act now prohibits — including blanket bans on pets and on tenants with children or in receipt of benefits — and confirm your notice templates are the current prescribed forms.