What is a Periodic Tenancy for East London Landlords?

You will probably be aware that one of the key changes included in the upcoming Renters’ Rights Bill is the end of fixed term tenancies. Once the provisions of the Bill come into effect, landlords will no longer have the option to set up or renew fixed term tenancies.

If you are a landlord with a rental property in Bromley, Croydon or East Ham and you are wondering how the changes will impact you, this article provides detailed information that will help you to get up to speed.

What is a periodic tenancy?

A periodic tenancy is a rolling contract that runs from month to month, or week to week, depending on how frequently the rent is paid. Fixed term tenancies typically convert into periodic tenancies at the end of the fixed term. With a fixed term tenancy, tenants do not have the flexibility to provide notice to end the tenancy and must wait for the end of the fixed period.

With a periodic tenancy, tenants have the freedom to move out after six months, as long as the correct amount of notice is provided.

The two types of periodic tenancy explained

There are two different types of periodic tenancy; statutory and contractual and this is how they differ:

What is a statutory periodic tenancy?

A statutory periodic tenancy is where a fixed term tenancy converts to periodic at the end of the tenancy term.

What is a contractual periodic tenancy?

A contractual periodic tenancy is one that is set up as periodic from the start of the tenancy.

Want to know more? Learn how to resolve a breach of tenancy agreement and explore the tenancy deposit dispute process for East London landlords.

What are the changes to periodic tenancies under the Renters’ Rights Bill?

The Renters’ Rights Bill will introduce many changes that are aimed at providing tenants with more rights and flexibility when renting properties.

Abolishing fixed-term tenancies – One of the major changes is to abolish fixed term tenancies so that tenants are no longer tied into a 6- or 12-month contract and will be able to provide two months’ notice to end their tenancy.

No more Section 21 notices – Another key change is that landlords will no longer be able to serve a Section 21 eviction notice and they will need to have a legally defined reason for evicting tenants. If the landlord wants to sell their property, they will not be allowed to serve an eviction notice within the first 12 months of a tenancy, so there will be more security for tenants regarding evictions.

New grounds for eviction under Section 8 – There are new grounds for eviction under Section 8 and a minimum four months’ notice must be given to tenants for grounds such as selling or moving into the property. The notice required under the grounds of rent arrears will increase from two months to three months.

Pros & Cons of Periodic tenancies

The new rules under the Renter’s Rights Bill, including the end of fixed term tenancies, will provide several benefits to tenants but there are also some advantages for landlords too.

Advantages of periodic tenancies for landlords & tenants

Pros (for tenants)

• More flexibility to end tenancy without waiting for a fixed term to end.
• They won’t need to complete any paperwork to renew tenancies as there will be a rolling contract.

Pros (for landlords)

• Less paperwork as they won’t need to renew fixed term tenancies.
• Tenancy changes such as rent increases won’t have to wait until the end of the fixed term. However, there will be new rules around applying rent increases, which will be limited to one per year and it will be easier for tenants to challenge unfair rent increases.

Disadvantages of periodic tenancies for landlords & tenants

Cons (for tenants)

• They won’t have the security of a long, fixed term contract (although there will be extended notice periods for certain grounds for eviction).
• Landlords can provide four months’ notice after the first 12 months if they want to sell or move into the property.

Cons (for landlords)

• There may be a higher turnover of tenants, leading to more void periods and increasing marketing costs/agency fees.
• Under the new rules, the landlord will usually need to provide longer notice periods to tenants, depending on the grounds for eviction.

Want to find out more? Find out whether being a buy-to-let landlord is still worth it in East London and read up on how to check a tenant’s right to rent.

Questions about periodic tenancies in east London

Understand what a periodic tenancy is for your east London let?

There will be many changes coming into force under the Renters’ Rights Bill and if you are feeling overwhelmed by the new responsibilities, we’re here to help.

As an experienced east London letting agent covering Gants Hill, Ilford and Forest Gate, we can help you to prepare for the reforms. We also provide a guaranteed rent scheme to protect you from losing money through missed rent payments or vacant properties.

Want a more reliable way to let your property? Discover our guaranteed rent in Romford, rent guarantee service in Dagenham & guaranteed rent in Forest Gate.