Tips For Tenant Lease Renewal Incentives In The UK

Since 1 May 2026, the entire concept of a tenant lease renewal in England has effectively disappeared. The Renters’ Rights Act 2025 abolished fixed-term assured shorthold tenancies (ASTs) for existing tenants, converting them all into periodic tenancies that roll on indefinitely. What that means for you as a landlord is simple: you can no longer offer a “new 12-month deal” to keep a good tenant happy. The old incentive playbook — “sign a new fixed term and I’ll knock £50 off the rent” — is no longer lawful.

I’ve been writing about the private rented sector for years, and this is the single biggest shift I’ve seen. The question I hear most often from landlords now is: if I can’t use a renewal to lock in a rent increase or secure a longer commitment, what can I actually do to encourage a tenant to stay? The answer involves a mix of legal processes, practical gestures, and a clear understanding of what the new law allows. Here’s what you actually need to know.

If you’re still using tenancy templates that reference a fixed end date or Section 21, now is the time to update them. I’d also recommend reviewing your approach to tenant retention — because the rules of the game have changed completely. For more on what to look for in a modern tenancy agreement, this guide on spotting red flags in UK rental agreements is a good place to start.

What a periodic assured tenancy actually means for incentives

The most important consequence of the new regime is this: you can no longer trade a lower rent for a longer commitment. Under a periodic tenancy, the tenant can give two months’ notice and leave whenever they want. There is no “lock-in” period. So the traditional incentive — “sign a 12-month renewal and I’ll reduce the rent” — is not just impractical, it’s unlawful. The tenancy is already periodic, and offering a new fixed term is not permitted.

What you can do instead is focus on the things that make a tenant want to stay. That means maintaining the property well, responding quickly to repairs, and being fair and transparent about rent increases. In my experience, tenants who feel valued and secure are far less likely to give notice, even without a financial incentive tied to a renewal.

If you’re unsure how to handle a situation where a tenant wants to leave after a short stay, this article on renting after a job relocation covers the practicalities from the tenant’s perspective, which can help you anticipate their needs.

Why tenant retention matters more than ever

With no fixed end date, the risk of void periods has shifted. Previously, you could plan around a known move-out date. Now, a tenant can give notice at any time, and you have no guarantee of when the next tenancy will start. According to the transitional provisions of the Renters’ Rights Act, there is no longer any automatic incentive for a tenant to move out at the end of a fixed term — but equally, there is no incentive for them to stay beyond what you create.

Consider this scenario: you have a reliable tenant who pays on time and looks after the property. Under the old system, you might have offered them a £20-per-month reduction to sign a new 12-month fixed term. That gave you certainty. Now, you can’t offer that deal. The tenant can stay on the same terms indefinitely, but they can also leave with two months’ notice. The only way to increase rent is via a Section 13 notice, which the tenant can challenge at the First-tier Tribunal if they think the proposed rent is above the market rate.

What I tend to notice is that landlords who invest in the relationship — not just the contract — are the ones who keep tenants long-term. A small gesture like replacing an old appliance or redecorating a tired room can be more effective than a rent discount that you can’t legally structure as a renewal incentive anyway.

If you’re preparing a property for a new tenant and want to make a good first impression, budget-friendly decorating tips for rentals can help you create a space tenants are reluctant to leave.

Where landlords get the new rules wrong

The most common mistakes I see come from landlords who haven’t fully absorbed that the old system is gone. Here are the three biggest errors, and how to avoid them.

Offering a new fixed-term tenancy to an existing tenant

This is the most frequent mistake. A landlord thinks they’re being helpful by offering a “renewal” with a slightly lower rent. But from 1 May 2026, offering a new fixed-term AST to an existing tenant is not a lawful tenancy under the new regime. The transitional provisions of the Renters’ Rights Act converted all existing ASTs to periodic tenancies on that date. Any attempt to create a new fixed-term agreement would be unenforceable as a fixed term. The tenancy would still be periodic, and the tenant would not be bound by the end date you tried to impose.

Using Section 21 or threatening eviction without a valid ground

Section 21 notices ceased to be valid from 1 May 2026. If you want possession, you must use a Section 8 notice based on one of the statutory grounds (1–17). For example, if you want to sell the property, you can use new Ground 1A, but you cannot serve notice in the first 12 months of the tenancy, and you must not re-let the property for three months after obtaining possession. A landlord who tries to use an old Section 21 notice will find the court rejects it, and they’ll have to start the process again — wasting time and money.

Increasing rent without a valid Section 13 notice

Some landlords assume they can agree a rent increase with the tenant informally, or include it in a “new agreement”. Neither is valid. The only lawful route to increase rent on a periodic assured tenancy is a Section 13 notice. You must serve at least two months’ notice (or one month for weekly/fortnightly tenancies), and the increase cannot take effect sooner than 52 weeks from the start of the tenancy or from the date the last increase took effect. If the tenant challenges the notice at the First-tier Tribunal, the tribunal will determine the market rent — but it cannot order a rent below the current one. If you try to increase rent by any other method, the increase is not enforceable, and the tenant can simply refuse to pay the higher amount.

→ Scroll right to see all columns

If you’re dealing with a tenant who is struggling with rent and you’re considering your options, this broader guide to renting in the UK includes practical advice on communication and dispute avoidance that applies to both sides.

Writing about topics like this takes real time and research. If you buy something through an Amazon link on this page, I may earn a small commission — at no extra cost to you. It’s one of the things that makes it possible to keep BritWealth free to read. I only link to products that are genuinely relevant to the article.

Practical steps to retain tenants and manage rent under the new rules

Here’s what you can actually do, step by step, to keep good tenants and handle rent increases lawfully.

Review and update your tenancy agreement template

If your tenancy agreement still references a fixed end date, a Section 21 notice, or an expiry clause, it is now obsolete. For any new tenancy starting after 1 May 2026, the agreement must be drafted as a periodic assured tenancy from the outset — no expiry date, no fixed term. Include a rent review clause that specifies rent will be reviewed annually and increased by reference to the Section 13 process. This makes the process transparent for the tenant and avoids confusion later. If you’re unsure about the wording, it’s worth consulting a tenant landlord lawyer who specialises in the new regime.

Set up a rent review reminder system

Since you can now only increase rent via Section 13, you need to plan ahead. Set a reminder two to three months before the anniversary of the tenancy to serve a Section 13 notice if you want to increase the rent. The notice period is at least two months, and the increase cannot take effect sooner than 52 weeks after the start of the tenancy or from the date the last increase took effect. If you miss the window, you have to wait another full year. A simple calendar alert or a property management app can prevent this.

Use RRA-compliant Section 8 notices for possession

If you need to recover possession — for example, because the tenant is in serious persistent rent arrears or you genuinely want to sell — use the updated Section 8 notice templates that reflect the new grounds and notice periods from May 2026. For new Ground 1A (sale), you must serve two months’ notice, and you cannot use it in the first 12 months of the tenancy. After obtaining possession, you must not re-let the property for three months. Using the wrong template or an outdated ground will delay the process and could result in the court rejecting your claim.

Invest in property improvements that matter to tenants

Since you can’t offer a financial incentive tied to a renewal, focus on the physical condition of the property. A well-maintained home with modern appliances, good heating, and proper ventilation is far more likely to retain a tenant. Small upgrades — like a smart water leak detector that alerts both you and the tenant to potential flooding — can demonstrate that you care about the property and the tenant’s safety. These are the kinds of gestures that build loyalty without needing a contract clause.

Understand the future: no ‘renewal’ at all for new tenancies

For any tenancy started after 1 May 2026, there is no concept of renewal because the tenancy has no fixed end date. The tenant has full security of tenure from the start and cannot be removed without a statutory ground. The 12-month protection under new Ground 1A and Ground 1 (landlord occupation) means you cannot serve notice to sell or move in during the first year. This is a fundamental shift. If you’re granting a new tenancy now, you need to accept that you are entering a long-term relationship with no guaranteed exit. Plan your finances accordingly.

• 1
  Update your tenancy agreement

  Remove all references to fixed end dates and Section 21. Draft as a periodic assured tenancy with a rent review clause referencing Section 13.

• 2
  Set a rent review calendar reminder

  Serve a Section 13 notice 2–3 months before the tenancy anniversary. The increase cannot take effect sooner than 52 weeks after the last increase.

• 3
  Use only RRA-compliant Section 8 templates

  For possession, use updated notices reflecting new grounds and notice periods. Ground 1A (sale) requires 2 months’ notice and cannot be used in the first 12 months.

• 4
  Invest in property improvements

  Focus on maintenance, modern appliances, and safety devices. These build tenant loyalty more effectively than financial incentives you can no longer offer.

If you’re a tenant reading this and wondering how the changes affect your rights, this lease signing checklist for UK renters covers what to look for in a periodic tenancy agreement.

Frequently asked questions

If you’re dealing with a complex legal situation and need tailored advice, speaking to a tenant landlord lawyer who understands the new regime can save you time and prevent costly mistakes.

Sources and Further Reading

Renting in a new UK city: essential strategies for success — Practical advice for tenants navigating a new area, useful for landlords who want to understand what tenants value in a new location.

Smart ventilation tips for renting an apartment in the UK — A guide to maintaining good air quality in rentals, relevant for landlords looking to improve property condition and tenant satisfaction.

Tenancy renewal UK: what landlords need to know about the Renters’ Rights Act 2025. LetSafe UK, 2026.

Implementing the Renters’ Rights Act 2025: our roadmap for reforming the private rented sector. UK Government, 2025.