From May 1, 2026, every assured shorthold tenancy in England automatically converts to an Assured Periodic Tenancy. This isn’t a choice landlords can opt out of it’s a mandatory transformation written into the Renters’ Rights Act 2025. All existing fixed-term ASTs become rolling periodic tenancies on this date, and it becomes illegal to grant new fixed-term ASTs after April 30, 2026.
For landlords accustomed to the security of 12-month fixed terms, this change represents a fundamental shift in how rental income works. Understanding what periodic tenancies mean in practice how they affect your cash flow, possession rights, rent increase mechanisms, and overall investment security is essential for planning your next steps.
This guide explains exactly what periodic tenancies are, how they differ from fixed-term ASTs, what the financial implications are for landlords, and why many are choosing guaranteed rent models that operate outside the periodic tenancy system entirely.
What Are Periodic Tenancies?
A periodic tenancy is a rolling tenancy that continues indefinitely until either party ends it by giving proper notice. Unlike fixed-term tenancies which run for a set period (typically 6 or 12 months) before automatically ending, periodic tenancies have no predetermined end date. They continue month-to-month or week-to-week depending on how rent is paid.
Periodic tenancies have always existed in the rental sector they’re what happens when a fixed-term AST expires and neither party signs a new agreement. The tenancy automatically becomes ‘statutory periodic’ and continues under the same terms. What’s changing from May 1, 2026 is that ALL tenancies must be periodic from the start. The fixed-term option disappears entirely.
Under the new framework, your tenancy starts as periodic immediately. There is no initial period where the tenant is locked in. From day one of the tenancy, the tenant can serve two months’ notice to leave. There’s no ‘guaranteed’ minimum period where you can rely on receiving rent your income security extends exactly two months from any given date.
This represents a complete reversal of the risk profile between landlords and tenants. Under fixed-term ASTs, landlords bore the risk that tenants might leave at the end of the fixed term, but had certainty for the duration of that term. Tenants bore the risk of being locked into longer commitments. From May 1, 2026, all the flexibility sits with tenants while all the uncertainty sits with landlords.
How Tenants Can End Periodic Tenancies
Tenants can terminate Assured Periodic Tenancies by giving two months’ written notice. The notice must be given to expire on the last day of a tenancy period typically the day before rent is due. If rent is due on the 1st of each month, the notice must end on the last day of a month. If rent is due on the 15th, notice must end on the 14th.
Importantly, tenants can serve this notice at any time. There’s no minimum period they must stay, no penalty for leaving, no requirement to give reasons. They simply provide two months’ notice and leave when the notice expires. This can happen after one month, six months, two years, or any point during the tenancy.
The financial implications for landlords are severe. You cannot plan cash flow beyond a two-month window. You cannot guarantee to mortgage lenders that rental income will continue for any specific period. You cannot coordinate property sales, refurbishments, or portfolio changes with any certainty because you don’t know when tenants might serve notice.
Compare this to the traditional system where a tenant signing a 12-month AST gave you 12 months of income certainty (minus possession via Section 21 if needed). Now you have zero certainty beyond the notice period. Every month could potentially be a tenant’s second-to-last month in your property if they’ve already served notice.
How Landlords Can End Periodic Tenancies
Landlords face a much more restricted position. You cannot simply serve notice to end a periodic tenancy you must prove one of 37 Section 8 grounds for possession and apply to court. Every possession claim requires evidence, legal proceedings, and court orders. The straightforward Section 21 route has been permanently abolished.
The new mandatory grounds include: selling the property (with a 12-month ban on re-letting to prevent abuse), landlord or family member moving in as principal residence, persistent rent arrears of three months or more, anti-social behaviour, and certain other specific circumstances. Each requires substantial evidence and proper procedure.
Discretionary grounds give judges flexibility to refuse possession even if the ground is proven. These include some arrears scenarios, breach of tenancy obligations, deterioration of property condition, and other matters where courts may decide possession isn’t proportionate. Landlords have no guarantee of success even with valid grounds.
The practical timeline for possession has extended dramatically. Under Section 21, landlords could typically regain possession within 4-6 months from deciding they needed it. Under the new Section 8 system, you’re looking at 6-12 months minimum longer if the tenant defends the claim or if courts are backlogged (which they already are and will worsen significantly post-May 2026).
Rent Increases Under Periodic Tenancies
Landlords can only increase rent once every 12 months under periodic tenancies, using the Section 13 notice procedure. You cannot include rent review clauses in the tenancy agreement these become unenforceable from May 1, 2026 except for certain social housing arrangements.
To increase rent, you must serve Form 4A (Section 13 notice) giving two months’ notice of the proposed new rent. The notice must specify the new rent amount and when it takes effect. Tenants have the right to challenge the increase at the First-Tier Tribunal if they believe it’s above market rent.
The tribunal process creates risk for landlords. If a tenant refers your rent increase to tribunal, the tribunal determines what the market rent should be. Critically, the tribunal cannot set rent higher than what you proposed but they can set it lower. If you proposed £2,000/month but tribunal determines market rent is £1,850, that’s what you’ll receive. The tribunal’s decision is binding.
This rent control mechanism fundamentally changes the power dynamic. Previously, landlords could set rent at tenancy renewal and tenants could either accept it or leave. Now, tenants can challenge rent increases through a free tribunal process, putting downward pressure on rent levels and making landlords nervous about proposing anything above clearly evidenced market rates.
For landlords with multiple properties, coordinating rent increases becomes complex. You can only increase rent once annually per property, and you must give two months’ notice each time. If you have 10 properties, you’re constantly managing rent increase notices, tribunal risk, and tenant pushback. The administrative burden increases while your control over income decreases.
The Financial Impact on Landlords
Let’s calculate the real financial impact of periodic tenancies using a typical scenario. You have a two-bedroom London property with market rent of £1,800/month. Under the old system with 12-month fixed terms, you had reasonable confidence of £21,600 annual income (minus voids between fixed terms). Under periodic tenancies from May 1, 2026, your income predictability drops to zero beyond two months.
If a good tenant serves two months’ notice to move closer to family (completely allowed under the new rules), you face an unexpected void period. Average void for London properties is 28 days, costing £1,800 lost rent plus £600-£1,000 in carrying costs (mortgage, council tax, utilities). Total void cost: £2,400-£2,800.
Under periodic tenancies, you cannot prevent this void or plan around it because you don’t control when tenants decide to leave. You might have three tenants over five years each staying 18-20 months, creating multiple void periods. Or you might have a tenant leave after just six months because their circumstances changed. The unpredictability itself is the problem.
Mortgage lenders are already adjusting their lending criteria to account for increased income uncertainty. Some lenders now require larger deposits for buy-to-let properties or apply stricter stress tests to rental income calculations. The assumption that fixed-term tenancies provided reliable income is built into current lending practices what happens when that assumption disappears is still unfolding.
Portfolio landlords with multiple properties face compounded uncertainty. With 10 properties under periodic tenancies, you’re managing potential turnover on any or all properties at any time. You cannot plan a refurbishment schedule, coordinate sales, or manage cash flow with any certainty. The operational complexity increases while your control over operations decreases.
Why Guaranteed Rent Schemes Avoid All These Issues
Here’s the critical point many landlords are discovering: periodic tenancy rules only apply to Assured Shorthold Tenancies. Elliot Leigh’s guaranteed rent scheme doesn’t use ASTs we use Corporate Lease Agreements where we become your tenant under a commercial lease arrangement.
Commercial leases aren’t subject to the Renters’ Rights Act 2025. There’s no conversion to periodic tenancies on May 1, no two-month tenant notice rights, no Section 13 rent increase restrictions, no tribunal challenges. We agree a fixed contractual term with you and pay guaranteed rent for that entire period.
You receive the same payment on the same day every month regardless of whether our individual occupants stay or leave. Turnover between occupants doesn’t create voids for you because we continue paying. Occupants serving notice to us doesn’t affect your income because you’re not renting to them you’re renting to Elliot Leigh.
With over £500 million paid to landlords over 23 years and consistent payment performance regardless of individual occupant circumstances, we provide the income certainty that periodic tenancies destroy. While traditional landlords navigate two-month notice uncertainty and tribunal risk, our landlords receive the same guaranteed payment every month complete financial predictability in an unpredictable market.
