For private rentals, the most common type of tenancy in the England is anAssured Shorthold Tenancy. These tenancies usually begin as fixed term tenancies where the duration is defined from the outset, typically anywhere between 6 months to three years (but can be up to seven years) as mutually agreed between the landlord and tenant.
An AST can be terminated at the end of a fixed term or in line with a pre negotiated break clause within the agreement by either party. A landlord must always serve a prescribed notice (a Section 21 Notice) to gain possession of the property and may need to obtain a court order.
Currently it is necessary to give tenants at least two months’ prior notice which cannot be served until after the initial four months of the tenancy have expired and only in accordance with a break clause or at the end of the fixed term. However, if the tenant is in serious breach of the terms of the tenancy agreement (including rent arrears) then the landlord can apply to the courts for a possession order, citing one of the Grounds for Possession contained in the Housing Act 1988 (as amended).
At the end of the fixed term, a new fixed term agreement is often made or the tenants move out. Alternatively, the tenancy might become a periodic tenancy. Periodic tenancies do not have a fixed end date, but continue on a month by month basis until ended by either the landlord or the tenant. Again, if the landlord wants to end the tenancy they must serve a Section 21 Notice or one of the Grounds for Possession Notices as above to end the tenancy.
Fixed term tenancies can be for any length of term agreed between the landlord and the tenant to suit their circ*mstances (up to seven years). Longer fixed terms can often provide security to landlords and tenants. For landlords, a longer tenancy is a good indicator that there will be a steady stream of rent and a reduced risk of the property being empty. For a tenant, a long tenancy gives them more time to settle in to the property.
The type of tenant your property is likely to attract should be considered when deciding the term of a tenancy. If you have a property that is likely to appeal to a family, a six month tenancy may be less appealing. Although it may not necessarily occur this way as it is also dependent on the prospective tenants' circ*mstances. If the term is more than three years, the tenancy agreement will need to be prepared and signed as a Deed.
You will be unable to increase the rent during a fixed term tenancy unless you have already agreed this with the tenant within the tenancy agreement.
At the point of renewal, if you appoint a letting agent they can negotiate a rent increase on your behalf and would usually commence negotiations around three months before the end of the fixed term. By giving the tenant sufficient time to make this decision, you will have more time to find a new tenant should the current tenant decide to move out at the end of the agreed term.
Talk to a KFH renewals letting agent to find out more information.
Short let rentals, typically a few weeks to six months, often command higher rents and may appeal to certain types of tenant. If the property appeals to tenants looking for short lets, this approach can be lucrative for landlords and home owners looking to temporarily let their property.
As short lets bring with them an increased turnover of different tenants, there is often more administration, wear and tear and the risk of void periods is increased.
Short lets may also appeal to homeowners who have a vacant property for a short while, such as when they are away on holiday.
You can find out more inour guide to short let properties.
