The private rental market in the UK is on the verge of its most significant transformation in years. The Renters’ Rights Bill, introduced in Parliament in September 2024, is currently moving through the House of Lords. If passed, it would eliminate fixed-term tenancies and replace them with open-ended rental agreements, changing the dynamic between tenants, landlords, and letting agents across the board.

This sweeping reform is part of a broader government push toward fairness, flexibility, and long-term security in the rental market. The changes will not only affect how landlords structure tenancies but will also provide more control to renters over their housing choices.

Fixed-Term Tenancies to Be Scrapped

The core feature of the Bill is the removal of fixed-term tenancy agreements. Instead, periodic tenancies; rolling contracts that continue from one rental period to the next, will become the legal standard for private renters. This means that once a tenant moves in, the agreement remains in place until either party formally ends it.

Under the proposed legislation, tenants would be free to leave their property at any time as long as they provide a minimum of two months' notice. Landlords, in turn, would still be able to regain possession of their property, but only through legally defined routes. In addition, it will be mandatory for all tenancy agreements to be in writing, and landlords will be restricted to charging no more than one month’s rent upfront.

The government argues that this shift is about empowering tenants and addressing power imbalances in the housing market. They contend that fixed-term contracts can trap renters in unsuitable housing or force them to continue paying for a property they need to leave due to changing life circumstances.

Landlord Considerations: Risks and Rewards

For landlords, the loss of fixed terms may initially feel like a loss of control. Fixed periods provide reliable income and allow for clearer financial forecasting. The majority of landlords currently offer 12-month contracts, often with break clauses at six months to provide some flexibility.

The proposed reforms could increase tenant turnover, resulting in more frequent void periods and greater administrative demands. According to the National Residential Landlords Association (NRLA), nearly 70% of landlords surveyed said they rely on fixed-term contracts to plan their business finances. Without them, more robust management strategies may be necessary.

However, there are potential advantages. In a periodic tenancy model, landlords will have increased flexibility to adjust rent in response to market conditions, subject to appropriate notice and legal process. And despite the removal of fixed terms, most tenants already stay in one place far longer than a year. The average private rental tenancy in England lasts 4.3 years, which has no reason to change purely due to the introduction of the Renters’ Rights Bill.

Something for landlords to be mindful of is that issuing a fixed-term contract after the law comes into effect could result in fines of up to £7,000, making it essential for landlords to understand and comply with the new regulations.

Offering Tenants Greater Flexibility

For renters, the new law is intended to represent a shift toward greater housing stability and freedom of choice. Instead of being bound to long contracts, tenants will be able to exit agreements with just two months' notice. This allows them to respond more easily to life changes such as job relocations, family needs, or dissatisfaction with property conditions.

It also reduces the financial risk of committing to a property that turns out to be unsuitable or poorly maintained. In theory, these changes should foster greater trust and confidence among renters, knowing they aren’t trapped by contractual limitations.

The government hopes this flexibility will also drive better standards in rental accommodation, as tenants can leave poor-quality homes without penalty, creating pressure for landlords to maintain higher standards.

Special Consideration for Student Rentals

One of the more debated aspects of the Renters’ Rights Bill involves student housing. Originally, the bill made no exception for student tenancies, which raised alarm among universities and landlords. Letting agents argued that allowing students to leave at any time with two months’ notice could severely disrupt the academic calendar and destabilise the student housing market.

In response to these concerns, the House of Lords has proposed a key amendment: allowing fixed-term contracts to remain in place for Houses in Multiple Occupation (HMOs) let to students. If accepted, this amendment will allow student landlords to maintain alignment with the academic year, providing a predictable structure for both parties.

It’s worth noting that Purpose-Built Student Accommodation (PBSA) is exempt from these changes. These properties can continue to offer fixed-term agreements as standard, unaffected by the reforms.

What Changes to Expect When the Bill Becomes Law

Once enacted, the following key changes will apply:

• Fixed-term tenancies will no longer be permitted in the general private rental sector.

• All new tenancy agreements will be periodic by default.

• Tenants can give two months' notice to leave at any time, starting from day one of the tenancy.

• Written tenancy contracts will become legally mandatory, eliminating verbal or informal agreements.

• Landlords may only request up to one month’s rent in advance.

Additionally, existing fixed-term contracts are likely to be converted to periodic tenancies automatically, with landlords expected to inform tenants of this transition within a specified timeframe.

How Landlords Can Prepare Now

Although the Renters’ Rights Bill is still making its way through Parliament, proactive landlords should begin preparing for these changes to avoid disruption later. Some practical steps include:

• Review current tenancy agreements and ensure all documentation is legally compliant.

• Keep rental properties in good condition to encourage longer tenancies.

• Use thorough tenant referencing to select renters likely to remain long term.

• Build strong tenant relationships by maintaining communication and addressing issues promptly.

• Budget for potential voids by setting aside emergency funds.

• Monitor local market rents to stay competitive and responsive.

According to data from Zoopla, the average UK rent rose by 6.6% in the 12 months to May 2025. This highlights the importance of staying informed about local market trends when setting or adjusting rent levels under periodic agreements.

So what's next?

The Renters’ Rights Bill signals a major cultural and legal shift in the UK’s private rental landscape. While the loss of fixed-term tenancies may be challenging for some landlords, it also presents a chance to build more transparent, flexible relationships with tenants.

By planning ahead and adapting management strategies now, landlords can continue to thrive in this evolving environment. For tenants, the Bill offers a more responsive and less restrictive framework, giving them the autonomy to choose where they live, without the constraints of long-term contracts.

Ultimately, landlords that continue to maintain property standards and keep tenant communication channels open, should see minimal disruption to their business, and are more likely to be prepared for change when it happens, minimising and negative impact on their property business.

To see how togetha can help your property business to thrive throughout any upcoming legislation changes, book your no-commitment, 20 minute demo today, and check out everything from compliance assistance, to financial reporting and optimisation recommendations.