The length of a fixed term offered in a tenancy agreement is really whatever you feel comfortable with, but as a general rule, 6 months is recommended.
When the Housing Act 1988 came into force, it used to be the case that a minimum term of six months was required under section 20 Housing Act 1988. However, section 96 Housing Act 1996 abolished this rule for all new tenancies from 27 February 1997 by inserting a new section 19A into the Housing Act 1988. This new rule even meant that a fixed term was no longer necessary, and in fact a periodic tenancy can be granted from the outset.
The new section 19A which applies to all tenancies from 27 February 1997 provides:
19A Assured shorthold tenancies: post-Housing Act 1996 tenancies.
An assured tenancy which—
(a) is entered into on or after the day on which section 96 of the Housing Act 1996 comes into force (otherwise than pursuant to a contract made before that day), or
(b) comes into being by virtue of section 5 above on the coming to an end of an assured tenancy within paragraph (a) above,
is an assured shorthold tenancy unless it falls within any paragraph in Schedule 2A to this Act.
See also Ratcliffe v Parkes – High Court appeal, which confirms that a fixed term can be for any period, including less than 6 months.
Our general recommendation, is to provide a fixed term of 6 months initially.
There are two primary reasons for this:
- Since October 2015, for England, the legislation changed so that a section 21 notice cannot be given until after month 4 from when the tenant first occupies. As a result, there’s no gain in offering a tenancy of less than 6 months.
- Changes to council tax rules from 1 April 2013 means that to ensure the tenant continues to be liable after the end of the fixed term and fails to give notice to leave (e.g. abandonment), a tenancy with a minimum fixed term of 6 months is better.
We don’t recommend a fixed term of longer than 6 months because if there is some problem with the tenant it can make it slower to start an eviction process, especially if you have to wait until the expiry of the fixed term. That being said, it is very common for landlords and in particular agents, to offer a 1 year (12 months) fixed term which is also absolutely fine if you prefer.
The exception to the general rule is student lettings. The length of a student letting term will vary slightly depending on local market practices but will be between 10 and 12 months.
Once the fixed term has ended, there is no need to give a new renewal tenancy. The tenancy will automatically continue as a contractual periodic tenancy where the tenancy contains such a clause (including where our tenancy agreement is being used). Otherwise, a “statutory periodic tenancy” will arise at the end of the fixed term.