Fixed-Term vs. Rolling Tenancies: Pros and Cons for UK Landlords

As a landlord, one of the key decisions you'll need to make when renting out your property to let in Colliers Wood is whether to offer a fixed-term tenancy or a rolling (periodic) tenancy. Each option has its advantages and drawbacks, and the right choice will depend on factors such as tenant stability, flexibility, and financial security.

At Your Home Managed, your leading property management company in Colliers Wood, we understand the importance of making informed decisions that fit with your goals.

In this guide, we’ll break down the pros and cons of fixed-term and rolling tenancies, helping you decide which is best for your rental property.

Read more: What is an AST?

What is a Fixed-Term Tenancy?

A fixed-term tenancy is a rental agreement that runs for a set period, typically six or twelve months. During this time, your tenant is contractually bound to stay in the property, and you cannot ask them to leave unless they breach the agreement.

Pros of Fixed-Term Tenancies

• Guaranteed Income: You’ll have rental income secured for the duration of the agreement, providing financial stability.
• Reduced Turnover: Fewer tenant changes mean less risk of void periods and lower marketing costs for finding new tenants.
• Easier to Plan Finances: Knowing when a tenancy ends allows better budgeting and planning for any future refurbishments or rent adjustments.
• Legal Clarity: A fixed contract minimises disputes as both your tenant and you, as the landlord, know your obligations and responsibilities.

Cons of Fixed-Term Tenancies

• Less Flexibility: If you want to regain possession of your property before the tenancy ends, you’ll need legal grounds to do so.
• Difficulty Removing Problematic Tenants: If your tenant is causing issues but not breaching the contract, removing them before the term ends can be challenging.
• Potential Voids: If your tenant chooses not to renew, you may face a gap between tenancies, impacting rental income.

What is a Rolling (Periodic) Tenancy?

A rolling tenancy, also known as a periodic tenancy, continues indefinitely on a month-to-month or week-to-week basis after the initial fixed term expires. This type of tenancy automatically renews unless either you, as the landlord, or your tenant serves notice.

Pros of Rolling Tenancies

• Greater Flexibility: You can regain possession more easily by serving a Section 21 notice (currently requiring two months’ notice in England).
• Easier to Adjust Rent: Rent increases can be introduced more frequently, following the appropriate notice period.
• Reduced Paperwork: No need to renew contracts every six or twelve months, saving administrative hassle.
• Shorter Voids: If tenants are unsure about their long-term plans, a rolling contract can encourage them to stay longer rather than commit to another fixed term.

Cons of Rolling Tenancies

• Less Stability: Your tenants can leave at short notice (usually one month), leading to unexpected void periods.
• Uncertainty for Landlords: The lack of a defined term makes it harder to plan property maintenance or refurbishments.
• Potential for Frequent Tenant Turnover: More tenant changes mean more time and money spent on marketing and re-letting.

Which is Better for UK Landlords?

The best choice depends on your priorities as a landlord:

• Choose a Fixed-Term Tenancy if you value stability, guaranteed income, and long-term planning. This is especially useful in areas with high demand for property to rent in Colliers Wood.
• Choose a Rolling Tenancy if you prefer flexibility, lower admin work, and the ability to adjust rent more frequently. This can be useful if you're uncertain about your future rental plans.

At Your Home Managed, we recommend discussing your situation with a professional letting agent in Colliers Wood like us to determine which option best suits your needs.

Helpful Tips for Landlords

• Review Your Tenant’s Circumstances: If you have reliable, long-term tenants, offering a new fixed-term agreement may be beneficial. If your tenants prefer flexibility, a rolling contract may work better.
• Factor in Market Conditions: In high-demand rental areas, fixed-term agreements help secure income, while in uncertain markets, rolling tenancies provide adaptability.
• Understand Legal Requirements: Ensure you comply with Section 21 notice rules when regaining possession under a rolling tenancy.
• Use a Letting Agent: Working with a property management company in Colliers Wood can take the stress out of managing tenancies, handling legal paperwork, and ensuring compliance.

Which Tenancy Type is Right for You?

Whether you opt for a fixed-term tenancy or a rolling tenancy, making an informed decision is key to successful property management. At Your Home Managed, we’re here to offer expert guidance and help you find the best approach for your rental property.

Call 0208 125 7780 or email info@yourhomemanaged.com to discuss your options with us.

In the meantime, we've answered some of your common questions about fixed-term and rolling tenancies.

Frequently Asked Questions

Can a fixed-term tenancy automatically become a rolling tenancy?

Yes, if neither party signs a new contract at the end of a fixed term, the tenancy automatically converts into a rolling (periodic) tenancy.

How much notice does a landlord need to give for a rolling tenancy?

In England, landlords must provide at least two months’ notice under Section 21 if they wish to regain possession of the property.

Can I increase the rent on a rolling tenancy?

Yes, but you must follow legal procedures, such as issuing a Section 13 notice for periodic tenancies.

Is a rolling tenancy riskier for landlords?

It can be riskier due to the uncertainty of tenant turnover, but it also provides greater flexibility.

Should I let my tenant decide between fixed-term and rolling tenancy?

It’s a good idea to discuss preferences with tenants, but ultimately, you should choose what fits best with your goals as a landlord.

How can I make tenancy management easier?

Using a property management company in Colliers Wood like Your Home Managed can help you handle tenant agreements, rent collection, and legal compliance efficiently.