We understand that keeping up with tenancy agreements can be confusing, especially when the fixed term of an assured shorthold tenancy (AST) expires. Our award-winning Landlord & Tenant team at Woodstock Legal Services explain the key differences between a rolling tenancy and renewing a tenancy for landlords. This insight breaks down the pros and cons of each option to help you make informed decisions for your property.

What Happens When a Fixed Term Assured Shorthold Tenancy (AST) Ends?

A common misconception is that tenants must vacate the property when the fixed term of an AST expires. However, when the fixed term ends, the tenancy doesn’t necessarily stop - it becomes either a contractual or statutory periodic tenancy, also known as a "rolling tenancy." This means the agreement continues, with the terms of the original AST still in place, rolling on month to month or week to week, depending on how the rent is paid.

Contractual vs. Statutory Periodic Tenancies

• A contractual periodic tenancy occurs when the AST has a clause that explicitly states the tenancy will continue after the fixed term.
• If no such clause exists, the tenancy becomes a statutory periodic tenancy.

Landlords must then decide whether to allow the tenancy to roll on periodically or to renew the AST with a new fixed term.

Allowing a Tenancy to Continue as a Rolling Tenancy

Pros and Cons of a Rolling Tenancy

Opting for a rolling tenancy can be a flexible solution for both landlords and tenants. However, it comes with both advantages and disadvantages.

• Pros for Landlords:
• All the terms of the original AST remain in place, giving landlords the ability to serve notice with at least two months' notice if they wish to regain possession of the property.
• No need to renegotiate new contracts, which saves time and paperwork.

• Cons for Landlords:
• Tenants can also serve notice to vacate, usually providing one rental period’s notice (or four weeks for weekly tenancies).
• Potential for more frequent tenant turnover.

Document Service Considerations for Landlords

Landlords need to be cautious with document service requirements when the tenancy becomes periodic. If the AST turns into a contractual periodic tenancy, landlords aren’t required to re-serve the “How to Rent” guide. However, if the tenancy becomes statutory periodic, landlords must serve the latest version of the guide, especially if a new version has been released.

Can You Increase Rent on a Rolling Tenancy?

Yes, landlords can increase rent during a rolling tenancy, but the process differs depending on whether the tenancy is contractual or statutory.

• In England, landlords can either agree on a rent increase with the tenant or serve a Section 13 Rent Increase Notice. This notice must give tenants at least one month’s notice (or more if the rental period is longer).
• In Wales, landlords must serve a RHW12 form to provide two months' notice before implementing a rent increase for periodic standard occupation contracts.

It's important to remember that tenants can challenge rent increases by applying to the First-Tier Tribunal, which will determine whether the increase is reasonable.

Deposit Implications for Rolling Tenancies

Rolling tenancies can also affect the handling of deposits. If the tenancy continues as a contractual periodic tenancy, it is treated as one continuous tenancy, meaning the deposit rules apply as they did during the fixed term.

However, if the tenancy becomes statutory periodic, it counts as a new tenancy. This distinction is crucial, as failure to comply with deposit protection rules could result in penalties of 1-3 times the deposit amount per tenancy. Therefore, landlords could face additional liabilities if deposits are not handled correctly, especially when renewing ASTs or moving into statutory periodic tenancies.

Renewing an Assured Shorthold Tenancy (AST)

When landlords choose to renew an AST, they secure a new fixed term with the tenant. This provides more stability, particularly if the tenant is reliable, as you know rent will be paid for the duration of the fixed term.

Advantages of Renewing an AST

• Provides long-term security with a fixed rental period.
• The landlord can renegotiate terms, including rent increases or additional clauses.

Disadvantages of Renewing an AST

• Landlords cannot evict a tenant during the fixed term without either waiting for it to end or using a break clause (if the AST includes one).
• Renewing ASTs comes with its own set of document service requirements, including issuing the latest “How to Rent” guide. Failing to comply with these requirements can invalidate a Section 21 notice.

How Will the Renters' Rights Bill Affect ASTs and Rolling Tenancies?

The Government's planned reforms to the private rented sector are set to significantly change the landscape for landlords. Under the proposed Renters' Rights Bill introduced in September 2024, all tenants will move onto a single system of periodic tenancies, which aims to offer tenants more security.

One of the most significant changes is the proposal to end assured shorthold tenancies (ASTs) and fixed-term tenancies altogether. Once the Bill becomes law, all existing ASTs will convert to assured periodic tenancies on a specified date. Landlords should keep an eye on the progress of the Bill as it makes its way through Parliament, as further amendments may occur.

Specialist Advice for Landlords from Woodstock Legal Services

Understanding the differences between a rolling tenancy and renewing an AST is crucial for landlords who want to protect their interests. At Woodstock Legal Services, our landlord and tenant team provide expert guidance to help you navigate tenancy agreements, rent increases, and upcoming legislative changes.

For personalised landlord legal advice, contact our Landlord & Tenant team by emailing contact@woodstocklegalservices.co.uk or completing the form below.