Periodic vs fixed term – what’s the difference?

At The Letting Quarter, one of the most asked questions we receive is what’s the difference between being in a fixed-term and a periodic tenancy.

It’s important that Tenants and Landlords are aware of what kind of tenancy they are in.

Fixed-Term Tenancies:

Definition: A fixed-term is a tenancy that is set for a specific period, usually 6 or 12 months. It has a defined start and end date.
Duration: The tenant agrees to rent the property for a fixed period, and both parties are bound by the terms and conditions specified in the agreement for the duration of that term. Almost all new tenancies start with an initial fixed term. 
Security of Tenure: During the fixed term, the landlord usually cannot terminate the tenancy unless there has been a breach of contract, and the tenant is obligated to pay rent for the entire term.
Renewal: At the end of the fixed term, the tenancy may either be renewed, ended (with the required notice), or it may transition into a periodic tenancy.

Periodic Tenancies:

Definition: A periodic tenancy (commonly known as a rolling tenancy), does not have a fixed end date. Instead, it continues on a rolling basis, typically from month to month.
Duration: Whilst periodic, the tenancy will continue indefinitely until either party gives notice to terminate the tenancy, or enter into a new fixed term.
Flexibility: Periodic tenancies offer more flexibility as they allow either party to end the tenancy at any time with proper notice (usually, one period month notice for the tenant, and two months’ notice from the Landlord).
Rent increases: The rent may be subject to change with proper notice in a periodic tenancy, although the rent can only be increased once per year, whereas in a fixed-term, the rent is usually fixed for the duration of the agreed term.

The Renters Reform Bill, which is currently being debated in Parliament, proposes the abolishment of fixed terms, meaning that all tenancies will have to be periodic.

It’s important to note that the specific rules governing tenancies may vary between England, Scotland, Wales and Northern Ireland, so it’s advisable to consult with your agent.