The bill mentions fixed-term tenancies becoming periodic. Do I still need to sign a new contract each year, or does it just roll over? And can I still do rent reviews annually?
Quick Answer
Fixed-term tenancies are being replaced with periodic ones, removing the need for annual contract renewals. Rent reviews remain annual, but must follow new guidelines, not via new agreements.
## Understanding the Shift to Periodic Tenancies
From 1 May 2026, the Renters' Rights Act 2025 fundamentally alters the structure of residential tenancies in England by abolishing fixed-term agreements, converting all tenancies to periodic agreements from day one. This means landlords will no longer sign new contracts annually; instead, the tenancy automatically rolls over on a monthly basis, offering tenants greater security and flexibility. For existing fixed-term tenancies, they will convert to periodic tenancies upon their expiry, post-May 2026.
This change streamlines the process by removing the need for frequent contract renewals, which previously often involved administrative effort and potential legal fees. While it simplifies ongoing management, it also necessitates a clear understanding of the new eviction grounds and notice periods, which replace the former Section 21 no-fault process. Landlords will need to ensure their tenancy agreements reflect these statutory changes, even though the underlying periodic nature is now legally mandated.
## Can Landlords Still Conduct Annual Rent Reviews?
Yes, landlords can still conduct rent reviews annually under the new Renters' Rights Act 2025. The legislation permits landlords to increase rent once every 12 months, provided proper notice is given to the tenant. This notice must be given at least one month before the proposed increase takes effect. The rent increase must also be fair and reflect market rates, as tenants will have the right to challenge excessive increases at a First-tier Tribunal, which can determine if the proposed rent is above market value.
This annual review mechanism is consistent with previous practices for periodic tenancies but is now uniformly applied across all rental agreements. For example, a landlord with a property currently letting for £900 per month could look to increase it to £950 per month, but they must ensure this is justifiable against local market comparables. If a landlord attempts to increase rent twice within a 12-month period, or if the increase is deemed unreasonable, tenants have clear avenues for challenge, which could lead to tribunals ruling in favour of the tenant and potentially overturning the proposed increase.
## What are the Practical Implications for Investors?
The practical implications for investors include a reduced administrative burden from not having to renew fixed-term contracts, but also a need to understand the new grounds for possession. The abolition of Section 21 evictions means landlords must rely on the reformed Section 8 grounds, which are now expanded to cover situations such as repeated serious arrears (e.g., two months’ rent arrears at the time of serving notice, and two months’ arrears at the time of the court hearing), or if the landlord genuinely intends to sell the property. This shifts the focus from 'no-fault' to 'reason-based' evictions.
From a financial perspective, consistent annual rent reviews are still possible, allowing landlords to adjust income in line with inflation and market demand. However, the increased security for tenants might mean longer tenancies, reducing void periods but potentially increasing wear and tear over time. For example, a landlord with a well-maintained property consistently achieving £1,200 per month could project a 5% annual increase to £1,260, relying on market data to support this. Staying informed about local market rents will be essential to justifying increases and avoiding tribunal challenges.
## Investor Rule of Thumb
With fixed-term tenancies abolished from May 2026, investors must transition from managing fixed-term renewals to understanding and adhering to the new periodic tenancy rules, particularly regarding possession grounds and annual rent review processes.
## What This Means For You
The Renters' Rights Act 2025 necessitates a shift in how you manage tenancies and plan your portfolio. Most landlords don't face issues because of changes to tenancy structures, but because they fail to adapt their strategies and procedures. If you want to understand the granular details of these legislative changes and how to implement robust new tenancy management strategies effectively, this is exactly what we cover and strategise inside Property Legacy Education.
Steven's Take
The move to periodic tenancies from May 2026 is a significant change, but not one to fear if you understand the new framework. As an investor, you'll save administrative time not having to issue new contracts, which is a win. However, the focus now shifts entirely to tenant management and understanding the new possession grounds. My advice is to ensure your properties are well-maintained and your tenants are properly vetted. Regular, fair rent reviews are still possible annually. The key is to be proactive and informed, rather than reactive, to these legislative updates.
What You Can Do Next
Review your current tenancy agreements and understand how they will convert to periodic tenancies from May 2026 – Consult with a property solicitor or legal expert for tailored advice.
Familiarise yourself with the expanded Section 8 possession grounds and their new notice periods by consulting the official government guidance on the Renters' Rights Act 2025 at gov.uk/housing.
Implement a robust system for tracking local market rents to justify annual rent increases – Utilise local letting agents for comparable data or property portals like Rightmove and Zoopla.
Ensure clear communication with tenants regarding any upcoming rent reviews, providing the statutory one-month notice period as outlined in the new legislation.
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