Which Tenancy Agreement Is Right for You in The UK?

1. Whether you’re renting a place for the first time or looking for your next place to live, it’s important to know the ins and outs of tenancy agreements. If you get the wrong type of tenancy, you could face legal issues, financial problems, or a conflict that’s hard to settle. This article will guide you through the different types of tenancy agreements used in the UK and how to choose the right one for your needs.

What Is a Tenancy Agreement?

A tenancy agreement is a legally binding contract between a landlord and a tenant. This contract outlines the rights and responsibilities of both the landlord and the tenant, including the amount of rent to be paid, the length of the tenancy and the renewal of the tenancy. There are different types of tenancy agreements used in the UK, and they’re suited for different situations.

1. Assured Shorthold Tenancy (AST)

The Assured Shorthold Tenancy is by far the most common type of tenancy agreement in England and Wales. It is used in most cases of private residential tenancies where the rent is between £250 and £100,000 annually and where the property is the tenant’s main residence.

Main Features:

• The landlord has a right to repossess the property after the end of a fixed term (with proper notice).
• The tenant will benefit from a protected deposit through a government-approved scheme.
• From April 2026, tenancies will have no fixed term.
• From April 2026, it will be a periodic tenancy from day one.

Recommended for: This tenancy agreement is best. Most of the time it is used by landlords renting to an individual tenant or a couple in England and Wales. It is also recommended for most tenants renting a property in England and Wales.

2. Fixed-Term Tenancy

A fixed-term tenancy agreement will exist for a specified number of months, usually 6 or 12. Both the landlord and the tenant will benefit from a fixed-term tenancy. However, from April 2026, under the Renters’ Rights Bill, fixed-term tenancies will no longer be standard for new residential lettings, as tenancies will move to a periodic system with no fixed end date.

Key features:

• Rent cannot be increased by the landlord.
• The tenant cannot terminate the tenancy before the end date without breaking the tenancy agreement.
• Both parties benefit from a fixed-term tenancy.
Previously best for:
• Landlords seeking a steady income for a fixed period
• Tenants seeking longer-term security through a fixed agreement

3. Periodic Tenancy

Previously, periodic tenancies were often agreed for fixed terms (such as 6, 12 or 24 months). However, from April 2026, most tenancies will move to a periodic structure with no fixed end date under the Renters’ Rights Bill.
Key features:

• Flexibility to terminate the tenancy by either with 2 months’ written notice
• Rent review can be more frequent
Best for:
• Tenants who requires flexibility with a tenancy agreement.
• Landlords who are unsure of future intentions for a property.

4. Joint Tenancy

This type of tenancy is applicable where two or more individuals share the same property. All the individuals sign the tenancy agreement. They share the responsibility of paying the rent. If one individual does not pay the rent, the rest are liable to pay the total amount.

Key Features:

•All the individuals have the right to the whole property.
•No individual has the right to terminate the tenancy without affecting the others.
•Each individual is ‘jointly and severally liable’ for the rent.

5. Excluded Tenancy (Lodger Agreement)

If the landlord is renting out a room in their property, which is their residential property, then the tenancy agreement is more suitable. In this type of agreement, the tenant is not as protected as they would be under the AST.

Key Features:

•The landlord has the right to end the tenancy with ‘reasonable notice.’
•No requirement to protect the deposit.
•Not covered under the Housing Act 1988.
•Best Suitable: An excluded tenancy is suitable where the landlord is renting out a room in their residential property.

So, Which Tenancy Agreement Should You Use?

Well, here is a quick summary to help you decide:

•Renting a property in England or Wales? → Use an AST
•Sharing the property? → Joint Tenancy is the way forward
•Renting out a room in your own home? → Lodger Agreement is the way forward

Also, worth mentioning are the separate systems in Scotland and Northern Ireland, where Private Residential Tenancies (PRTs) are in force under the Private Housing (Tenancies) (Scotland) Act 2016.

Conclusion

The right tenancy agreement is beneficial to both the landlord and the tenant. If you’re still unsure of the tenancy agreements, it’s always best to seek advice from a qualified solicitor or a reliable letting agent. After all, it’s always better to get it right the first time to save yourself the hassle and expense of getting it wrong down the line.