Journal
Short Term Tenancy Contracts: A London Landlord's Guide
By Seymont London ·
Short term tenancy contracts are becoming increasingly popular across London's rental market, particularly in high-demand areas where flexibility matters to both landlords and tenants. Whether you're managing a property between sales, accommodating corporate lets, or testing the rental market for the first time, understanding how these agreements work is essential. Our team has guided hundreds of landlords through the practicalities, and we'll share what you need to know to make informed decisions.
What Qualifies as a Short Term Tenancy?
In England, any assured shorthold tenancy (AST) under six months is generally considered short term, though there's no strict legal definition. The most common arrangements we see run between three and five months, giving both parties flexibility without the commitment of a standard twelve-month lease.
It's worth noting that whilst you can legally create tenancies shorter than six months, GOV.UK guidance confirms you cannot use the Section 21 'no fault' eviction process until at least six months have passed from the tenancy start date. This means if you're offering a three-month contract, you'll need the tenant to leave voluntarily at the end, or potentially pursue a Section 8 eviction if grounds exist. We always recommend building this consideration into your lettings strategy, particularly if you're working with properties in /estate-agents/kensington where tenant demand remains strong.
When Short Term Contracts Make Sense
Short term tenancy contracts work brilliantly in specific circumstances. Corporate relocations represent a significant market—professionals moving to London temporarily often need quality accommodation for defined periods. We also see them used effectively when landlords are planning renovation work, testing rental yields before committing long-term, or bridging gaps before a planned sale.
Areas with strong professional and international demand, such as those featured in our /property-to-rent/kensington listings, tend to attract tenants comfortable with shorter arrangements. According to Rightmove's 2023 rental trends report, average tenancy lengths in prime central London boroughs are notably shorter than the national average, reflecting this transient professional demographic.
However, shorter contracts do mean more frequent tenant turnover, which increases void periods, referencing costs, and general administration. Our /landlord-services team typically advises that the rental premium you can charge—often 10-15% above standard rates—should comfortably offset these additional costs.
Legal Requirements and Deposit Protection
Every short term tenancy contract must comply with the same legal framework as longer ASTs. You're still required to protect deposits in a government-approved scheme (DPS, MyDeposits, or TDS) within 30 days, provide an Energy Performance Certificate, gas safety certificate if applicable, and the government's 'How to Rent' guide.
One area that catches landlords out: even on a three-month let, you must serve all prescribed information correctly and meet Right to Rent checks as stipulated by the Home Office. The penalties for non-compliance haven't changed just because the tenancy is shorter—fines can reach £3,000 per breach according to GOV.UK enforcement guidance.
We also recommend being explicit about renewal terms in your initial contract. Will it roll into a periodic tenancy, or does occupation end absolutely on the specified date? Clear documentation prevents misunderstandings and potential disputes down the line.
Practical Considerations for Landlords
Furnished properties command the short-term market. Tenants seeking flexibility rarely want to move furniture for a few months, so a well-presented, fully equipped home significantly widens your applicant pool. Quality matters here—invest in durable, neutral furnishings that photograph well and appeal to professionals.
Pricing requires a delicate balance. While you can charge a premium for flexibility, overpricing will leave your property empty, negating any advantage. Our experience across central London suggests a 10-15% uplift is sustainable in high-demand postcodes, but this varies by location and season. Using our /valuation service gives you accurate, market-informed rental assessments based on current comparable properties.
Finally, consider your mortgage and insurance terms. Many standard buy-to-let mortgages permit short lets, but some lenders impose minimum tenancy lengths or require notification. Similarly, your buildings and contents insurance must cover short-term lets—always check before advertising.
Frequently asked
- Can I offer a tenancy shorter than six months?
- Yes, you can legally offer assured shorthold tenancies of any length in England. However, you cannot serve a Section 21 notice until at least six months have passed from the tenancy start date, regardless of the fixed term length. This means you rely on the tenant leaving voluntarily or potentially using Section 8 grounds if issues arise.
- Do I still need to protect the deposit on a three-month let?
- Absolutely. All the same legal requirements apply regardless of tenancy length. Deposits must be protected in a government-approved scheme within 30 days, and you must provide prescribed information to the tenant. Failing to do so can result in fines and prevents you from serving a Section 21 notice.
- What rental premium can I charge for short term flexibility?
- In high-demand London areas, landlords typically achieve 10-15% above standard twelve-month rental rates. However, this premium must be balanced against increased void periods, more frequent referencing costs, and additional administration. Market conditions and location heavily influence what tenants will accept.
- Are short term tenants harder to find?
- Not necessarily. Corporate relocations, professionals on temporary assignment, and those between purchases create consistent demand in central London. Properties that are well-presented, fully furnished, and competitively priced typically let quickly. The challenge is higher turnover rather than initial demand.
- What happens when a short term contract ends?
- This depends on your contract terms. The tenancy can end absolutely on the specified date (with tenant cooperation), convert to a periodic rolling tenancy, or be renewed for another fixed term. We strongly recommend documenting your preferred arrangement clearly in the initial agreement to avoid confusion.