Should I renew my tenancy agreement?

Should I renew my tenancy agreement?

It is optional for tenancy agreements to be renewed at the end of a tenant's fixed term notice period.

The main advantage of drafting a new agreement is that it provides security for both landlord and tenant, assuring them that neither can exit the agreement prior to the end of its fixed term. The fixed term would usually be a minimum of 6 months, although at SJM Properties we encourage 12-month tenancy agreements, to attract longer term tenants and hopefully reduce the need for landlords to pay reletting fees as often.

If a new agreement is not made, tenants will automatically be moved onto a periodic (usually monthly) rolling contract, thus giving them the freedom to vacate the property at any time with one month’s written notice. Likewise, landlords can ask their tenant to vacate the property by giving them two months' written notice.

A new agreement can also be beneficial as it opens up a natural opportunity for landlords to negotiate a new rent. Tenants might be more inclined to pay an increased rate if they know it will secure them another year's agreement.

There are typically small cost implications to the landlord for your agent to draw up a new agreement, for us this is a competitive rate at £50+VAT.

Overall, there is no definite ‘yes or no’ answer as to whether renewing your agreement is worthwhile for you, the key consideration should be your situation and whether it is beneficial (both landlord and tenant) keeping in mind your long-term plans. Perhaps you, as a landlord, are thinking about selling the property or you, as tenant are expanding your family and know you will be wanting a bigger property soon... In which case we would advise you to avoid committing to another agreement to give yourself flexibility.