Guaranteed Rent vs Traditional Letting — Which is Right for You?

The Renters' Rights Act 2025 (Royal Assent: 20 February 2025) has fundamentally altered the private rental landscape in England. The abolition of fixed-term Assured Shorthold Tenancies (ASTs), the introduction of Assured Periodic Tenancies (APTs), and the removal of Section 21 no-fault evictions have changed the risk profile of traditional letting significantly. For landlords weighing up their options, the comparison between traditional letting and a long-term lease with a professional provider looks very different today than it did before these reforms.

Traditional Letting Under the Renters' Rights Act: What Has Changed?

Under the previous framework, a landlord letting a residential property would typically use an Assured Shorthold Tenancy (AST) — a fixed-term agreement of 6 or 12 months, after which either party could end the tenancy. Section 21 allowed landlords to recover possession without providing a reason, provided correct notice was served.

The Renters' Rights Act has abolished this framework entirely. Fixed-term ASTs no longer exist for new tenancies. All new residential tenancies in England are now Assured Periodic Tenancies (APTs) — open-ended, rolling agreements with no fixed end date.

• Section 21 'no-fault' evictions have been abolished — landlords can no longer recover possession simply by serving notice without a valid ground.
• Tenants on an APT may give two months' notice to vacate at any time — there is no fixed term to provide income certainty.
• Landlords must rely on Section 8 grounds to seek possession — including rent arrears (typically two months' or more) or breach of tenancy conditions.
• Rent increases under an APT are governed by Section 13 — landlords may increase rent once per year using a prescribed notice process.
• The legislative and administrative burden on private landlords has increased considerably.

Guaranteed Rent: The Long-Term Lease Alternative

A long-term lease with a professional provider — such as a housing association, supported living operator or serviced accommodation company — operates entirely outside the residential tenancy legislation framework. It is a commercial lease agreement, governed by its contracted terms rather than the Housing Act 1988 provisions that apply to APTs.

The landlord receives a guaranteed, fixed monthly rental payment for the entire duration of the lease — typically 3 to 25 years — regardless of occupancy. The provider assumes day-to-day management responsibility. There are no void periods, no APT uncertainty, no Section 8 proceedings and no exposure to the Renters' Rights Act framework.

Comparing the Two Approaches

• Income certainty — Long-term lease: contractually guaranteed for the full term. Traditional letting (APT): dependent on the tenant remaining — two months' notice can be given at any time.
• Void periods — Long-term lease: none. Traditional letting: a real and recurring risk, particularly given the flexibility now available to tenants.
• Possession and eviction — Long-term lease: governed by commercial lease terms, no Housing Act proceedings. Traditional letting: Section 8 only, no Section 21.
• Rent increases — Long-term lease: fixed by contract. Traditional letting: once per year via Section 13 process.
• Management burden — Long-term lease: assumed by the provider. Traditional letting: ongoing for the landlord or their agent.
• Regulatory exposure — Long-term lease: significantly reduced. Traditional letting: increasing under the Renters' Rights Act.
• Potential gross yield — Traditional letting may achieve higher gross rents in a strong market. Long-term lease rents are typically set slightly below open market rates.

Which Type of Landlord Does a Long-Term Lease Suit?

A long-term lease is particularly well-suited to landlords who prioritise income certainty and long-term financial planning, those who are concerned about the implications of the Renters' Rights Act for their existing or future letting strategy, portfolio landlords seeking a structured and consolidated approach, and landlords who wish to remove themselves from the day-to-day demands of property management entirely.

Which Type of Landlord Does Traditional Letting Suit?

Traditional letting continues to suit landlords who wish to maximise gross rental income and are comfortable managing the risks associated with APTs, those who are experienced in navigating possession proceedings and regulatory compliance, and those who prefer to maintain direct control over their property and tenant selection.