Renewing rental tenancy for how long?

[Grassnote]

Advice please. I am currently renting and have inherited a property which will go on the market soon. With the proceeds from the sale I'll be able to buy a house in current area.

My rental contract ends in August and is up for renewal for either 6 or 12 months. Which should I go for? House for sale could sell quickly but also might not and I will need to find another house to buy in that time.

Pros for extending rental contract for another 12 months will take the pressure of selling/buying quickly and I'll be looking to buy somewhere next Aug instead of Feb. Landlord is very relaxed and friendly. Rental house is very nice in great location, no problems. Rent will not be increased due to covid.

Cons are that I'm paying a fortune in rent on one salary (mine) for me and my daughter. With the sale from the inherited house and savings I will be able to buy a house either mortgage free or very small mortgage so will be saving a huge amount on what I am paying in rent. Potentially saving £800-1200 a month on the rent I'm currently paying depending on mortgage. It's a lot of money.

Wwyd? Extend for 6 months or 1 year?

If you don't sign anything it moves to a periodic tenancy so would suit you very well. If you explain the situation to the letting agent and landlord they should be open to that but if not then 6 months if you're forced into it. It takes about 3-4 months once you accept an offer anyway! And that's after probate etc is settled...

I agree with the pp - let it become a statutory periodic tenancy. Is the inherited house in the same area? It could be more cost effective to move into it instead of carrying on renting if that's an option. I can't remember the rules but you'll potentially be liable for council tax on the inherited house and capital gains tax if the value increases between the death of the person you inherited from and the sale price. You must keep all the receipts for any costs you incur related to inheriting the house as you'll potentially need them to offset against the CGT liability.

I don't think LL would like rolling contract. I spoke to LA who only gave me 6 month or 12 month option. Inherited house not near me. Probate has been granted but house not on market yet.

Well there's little risk of being evicted at the moment so make the decision that's right for you. The LL can't make you sign up for a fixed term, the law doesn't make this your only option.

It's not up to the LL. if you don't want to sign a new tenancy don't, it will just become a periodic tenancy. The downside is you have less protection from eviction. Landlord would have to give you two months' notice to leave (and ultimately get a court order if you wanted to take it that far which could take many months).

And as others have said there is little risk of being evicted at the moment and the notice period has actually been extended to three months but not sure when that change ends.

You don't have little protection from eviction, there's just less certainty about when the LL can serve notice. The flip side is that you have flexibility and can serve notice when it suits you. In the current climate a landlord would rather keep a reliable tenant who pays the rent than risk a void period with no income from their property.

Thanks all. But can a LL raise the rent during a rolling contract? With a fixed term contract LL won't be able to do this. Also it might cause friction if LL wants me to sign contract and I refuse?

How about asking for a break clause? We have done that in the past - sign a 12 month tenancy with a 6 and 9 month break clause (where either tenant or LL can serve notice to cancel at no penalty)

That's a good option @lurker101 thanks.

I would go for a six month contract and then let it go to a periodic. That way you are covered for the foreseeable, but could still extend if required. House buying is a long process, it doesn’t always go smoothly, and you don’t want to feel pressured into finding something quickly.

Just a note - I am surprised that your LL/Agent aren’t asking for a 7 month contract at this time of year, to get over the Christmas New Year period.

Another thought...I rent out a property and have been happy to let people break the contract early providing I can find someone else to take over the lease. Do you think your LL would do that?

Sorry, meant to say, if your new home needs work then you can get it all done without having to live in a building site, and builders will get on quickly in an empty house, which you can use to negotiate for keeping costs down.

England - do nothing, stay in the property and it becomes a periodic tenancy. No-one can stop this.

the agent doesn't tell you about this because it means no fees for the renewal (which only the landlord pays now).

fixed term means no section 21 eviction (proceedings stopped until August anyway, and the backlog was huge before and will be colossal now) and no rent increase. There's a proper process for that anyway.

periodic tenancy means you could receive a section 21 or a rent increase notice. By the time both are enforced you'd probably be long gone anyway, and as you are buying you don't need a landlord reference.

simple solution: contact LANDLORD (not agent), explain what is happening, agree to go periodic, no hassle, no extra fees for him, you keep him posted on your purchase and then give your month's notice on exchange of contracts.

Can you not ask for a break clause. We've had it in everywhere we rented which meant that after 6 months we could choose to leave without any penalty.

Thinking about it a break clause makes better sense than rolling contact. I forgot to say I wanted to change the deposit method. EA made me agree to some scheme that I pay £50 into each month that is not refunded instead of full deposit. I could have paid full deposit at beginning but they said only LL would accept that Anyway EA is saying I can now pay full deposit for new contract if LL agrees. I don't think I could change this on rolling contract could I?

So renewing for 12 months with break clause at 6 and 9 months sounds good. If I sign a 12 month contract that will also mean rent won't increase. Does that sound like a good idea? Thanks everyone

OP
How fast are you going to go on the selling side.
Is the house in a good area.
Will you be holding out for top dollar or open to offers now that prices are sliding

@Shinesweetfreedom good area and I probably won't accept under offer. Imagine it will sell before end of year. But then if I only renew rental for 6 months that won't give me much time to look for a property and also the house might not sell soon given the current climate etc.

is that Leaders by any chance? Basically you are paying extra rent!!

contact the landlord. Otherwise your plan with break clauses sounds good.