Thursday 21 February 2019

To renew, or not to renew: that is the question

Most tenancy agreements last for a fixed period of six or twelve months. That means the tenants are obligated to pay rent and remain in the property for that length of time, whilst the landlord can’t increase the rent or ask the tenants to leave (without applying to a court). Many take it as read that as the end date of the contract approaches they’ll need to renew it, but that isn’t actually the case.

You see, many tenancy agreements will make provisions for the contract to continue on a contractual periodic basis. And even if they don’t, by law it will continue on a statutory periodic tenancy. In layman’s terms, these are both monthly rolling contracts, whereby the tenant is required to give one month’s notice to vacate the property, whilst the landlord may give two months’ notice to end the tenancy and regain possession of the property.

Whilst some tenants like the certainty of a fixed contract, many actually prefer the flexibility of not being ‘locked in’ to a long-term rental contract in case their circumstances change. As a landlord and letting agent I have always operated like this i.e. not re-signing contracts, finding it to be the best and easiest way to continue a tenancy, both administratively and in providing flexibility to both the tenants and landlord.

For me and my landlords, there’s also the added security that should the tenants conduct change or they start to fail in their obligations e.g. they stop paying the rent, we can regain possession with two months’ notice rather than having to wait until the end of the new fixed term (or having to take them to court, which is time-consuming, expensive and uncertain).

And whilst a landlord can, if they wish, increase the rent with two months’ notice during a periodic tenancy, you may have read in a previous article that I prefer to promote long-term tenancies by avoiding this where possible; only increasing the rent when it is significantly out of kilter from the ‘going rate’.

So why then do most letting agents insist on renewals? Well, whilst some may argue there’s more stability for their landlords that way, I think the only stability many of them are interested in is receiving their fees i.e. locking in a prolonged management fee and charging a renewal fee to both the landlord and tenant.

It will be interesting to see once the tenant fees ban takes hold whether letting agents change their tune in this regard, when they can no longer charge the tenant a renewal fee. Or perhaps they’ll end up charging the landlord double to make up for this?

Are you a landlord or a tenant and, if so, do you prefer to renew contracts each year or let them amicably turn into a periodic tenancy? Please do get in touch and let me know.

(This article was featured in the Chichester Observer's property section on February 21, 2019)

Clive Janes, CRJ Lettings

If you are looking for an agent that is well establishedprofessional and communicative in Chichester, then contact us to find out how we can get the best out of your investment property.

E-mail me on or call 01243 624 599.

Don't forget to visit the links below to view my previous buy-to-let deals and Chichester Property News articles:

c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP

Chichester rental valuation


  1. After the fee ban there will be even less reason to renew as renewal creates a new tenancy meaning that any deposit held above the 5 week cap,including additional pet deposits will have to be returned to the tenant.

    1. The full guidance hasn't been released yet (very helpful from Government yet again) but yes, I understand your point to be the case.

      There has also been the suggestion that a statutory periodic tenancy is a new tenancy (continuing fallout from the Superstrike case) and thus you'd have to refund the balance between the current deposit and 5 week cap...yet a contractural periodic tenancy won't have this issue i.e. if there isn't mention in the tenancy agreement of the tenancy continuing after the fixed term you could be caught out.

      As I say, full guidance hasn't been provided so this does not constitute advice and may not be accurate.