The government’s plan to abolish fixed-term tenancy agreements in favour of open-ended, periodic arrangements is set to dramatically alter the landscape of the private rented sector (PRS), according to a leading lettings expert.
The proposed overhaul is at the heart of the Renters’ Rights Bill, which would allow tenants to end agreements with just two months’ notice, effectively handing them greater control over rental commitments.
Allison Thompson, national lettings managing director at property group Leaders, is calling on landlords to act swiftly. She advises reviewing tenancy contracts, investing in property maintenance, and closely monitoring local rent trends to avoid costly void periods.
“By taking early action, landlords can adapt with confidence and continue to operate successful rental businesses,” she said.
Shift in Power Dynamics
“If passed in its current form, the Bill will introduce open-ended tenancy agreements as standard,” Ms Thompson said. “This would reshape how private rentals operate, with far-reaching implications for landlords, tenants, and letting agents alike.”
Traditionally, fixed-term agreements offer a level of predictability for landlords—typically lasting 12 months with a six-month break clause. The move to periodic tenancies, Thompson warns, could mean more frequent tenant turnover and the risk of increased vacancy periods.
However, she also highlighted a potential benefit: “Landlords would gain more flexibility to adjust rents in line with market conditions and could regain possession of their properties more easily, provided they comply with legal requirements.”
According to the English Housing Survey, the average tenancy length already exceeds four years, indicating that many tenants may still opt for longer stays despite the changes.
Risk of Penalties for Non-Compliance
Landlords who fail to adapt could face penalties. Issuing fixed-term contracts after the new rules come into force could result in fines of up to £7,000.
Student housing has emerged as a point of contention. A proposed amendment in the House of Lords sought to preserve fixed-term tenancies for shared student homes to align with academic calendars, but it was ultimately rejected.
Purpose-built student accommodation (PBSA), however, remains exempt and will continue operating under fixed-term arrangements.
“Landlords operating in the student market should begin preparing for different rules depending on the type of property and agreement in place,” said Thompson.
As the Bill moves through Parliament, existing fixed-term tenancies are expected to convert automatically to periodic agreements, with landlords required to formally notify tenants within a defined timeframe.
The proposed legislation, still under debate, signals a fundamental shift in England’s rental system—one that landlords must navigate carefully to stay compliant and competitive.