How landlords can prevent void periods in their rental properties in the UK

How to Avoid Costly Void Periods for Your Rental Property

A ‘void’ is a period of time where a landlord’s property doesn’t have a tenant paying the rent. There is no tenancy agreement in place and no income. This is a worrying scenario for landlords with mortgages, since the mortgage repayments don’t stop just because the rent has stopped coming in.  

But even for landlords who own their properties outright with no mortgage, a void represents a big opportunity cost. Luckily there are several things landlords can do to lessen the chances of falling into this common problem. 

Sometimes tenants can leave your property with little notice – or even none at all. So the most important thing for preventing voids is to have a plan to find new tenants ready to go. 

How to Make Sure Your Rental Property Is Always ‘Tenanted’

Voids happen because tenants move out. Sometimes this happens suddenly, and sometimes it’s planned months in advance. As a landlord, there’s a lot you can do to make sure you are never caught by surprise when a tenant moves out. 

Use Fixed Terms

A fixed term is an amount of time during which your tenant cannot end the tenancy by serving notice. In other words, during a fixed term, your tenants are locked into the contract. Contracts with no fixed term, or where a fixed term has ended, but the tenants remained in the property, are called ‘periodic’. They run from period to period, and the period is usually monthly in the UK. 

Using fixed terms is useful because it means your tenants are very unlikely to suddenly leave the property during this period. If they do, they will still be liable to pay the rent until the tenancy is terminated (i.e. until the end of the fixed period), and if you wish, you can pursue them for unpaid rent via the courts. 

The benefit for tenants, of course, is that you are unable to use a Section 21 eviction notice to end the tenancy, and you can’t increase the rent during the fixed term, either (unless you pre-agreed a rent increase clause). Many tenants prefer fixed terms for this reason as it gives them stability and security. 

Offer Longer Lets

Given the benefits of fixed terms, one way to reduce the risk of a void is to offer longer fixed terms. Often, landlords only offer six months. But you can offer anything up to seven years, at which point there are legal and tax implications as the tenancy becomes more like a leasehold. (NB: Tenancies over three years’ length must be signed as a deed.)

Longer lets mean less tenant turnover, so fewer chances for your property to have an extended period without tenants paying the rent. Plus, offering a secure contract for one, two or three years may even help you attract tenants searching for a stable home. 

Know Your Tenant’s Rights

Did you know that tenants can move out on the last day of a fixed term without having to give notice? Most people don’t – tenants included. But even if you include a term in your contract demanding tenants give notice to end the contract at the end of the fixed term, they don’t have to do this. Even if they tell you they plan to stay on and would like the contract to become periodic, or to sign a renewal, they can renege on this by moving out before the end of the fixed term and not paying rent. 

Once a fixed term is over, if the tenants are still in place, the contract becomes periodic. For monthly contracts, tenants only have to give a minimum of one month’s notice to end the tenancy. Even if you include a term in your contract saying the tenant must give two months’ notice, this will probably not be enforceable if it came to court. 

Finally, in a joint tenancy where you rent to several people under a single contract (e.g. a house-share), any one tenant can serve notice to leave, and this will end the tenancy for all parties. The tenants don’t all have to agree before one tenant can serve notice. 

Communicate with Tenants

Usually, tenancies are not ended by one party giving formal notice to the other, but rather by mutual consent. If a tenant and landlord agree to end a tenancy on a given date, and the tenant moves out by that date and stops paying rent, then the tenancy can be taken to have been terminated. If done correctly, this is the best way to end a tenancy, since it suits all parties.

When making these agreements with tenants, try and think about the timing of things. Do you have any time away or holidays booked? Are you giving yourself enough time to find new tenants? Do the tenants want to end the contract around a slow time for the market, like Christmas? If so, you might want to make another suggestion to ensure you will be able to find tenants who can move in shortly after your current tenants move out. 

Have a Tenant-find Backup Plan Ready to Go

Given that tenants can sometimes end tenancies with very short notice, it’s important to make sure you have a good plan ready to swoop into action should you suddenly find yourself without tenants.

The fastest way to go from an empty property to a happy tenancy is to use Rent Now, OpenRent’s package for finding tenants and creating a contract. OpenRent lets you create an advert in minutes, and then puts it on Rightmove and Zoopla; websites where millions of tenants search for properties to rent. 

The service is so good that properties take just six days to let on average on OpenRent. 

OpenRent takes just six days on average to find you new tenants.

Create your advert

Be Pragmatic – Not Personal! 

If a tenant is asking to leave the property early, because for example, they worry they can’t afford the rent anymore, then it’s usually best to try to reach an agreement that works for all parties. Usually, the best thing to do is to agree that they are responsible for the rent until a new tenant is found. Tenants are usually happy with this compromise, and it ensures that you have no void.

For less considerate and abrupt endings to a tenancy, however, sometimes fighting through the courts isn’t worth it. If a tenant abandons their tenancy, it will often cost more time and money to force a tenant to pay all the remaining rent than to simply find a new tenant to take over the property. Although it can be very frustrating, it’s important not to see this as a personal attack, but to do what makes most sense for you as a landlord. Usually that means moving on to the next tenancy. 

You can use the tenancy deposit to cover any unpaid rent once the tenancy is over.  

Sometimes Voids Are Good

It’s important to acknowledge that sometimes voids are necessary or even useful. If you plan to have repair or decorating work done, then sometimes this is practical only once the tenants are out of the property. 

Some landlords always prefer to have a void in between tenancies, because it eliminates the risk that the old tenants suddenly refuse to move out – although this is rare. As mentioned,  most tenancies end with a simple agreement between tenants and landlords to end it on a given date.

Having a gap between tenancies also allows time for professional cleaning, inspection of the property and an inventory. This time can also be used to easily organise gas safety and other checks, since you do not have to plan around the tenant’s availability. 

Voids are felt more keenly by landlords who rely on their rental income, especially for paying the mortgage on the property. It’s always better to wait for the right tenant than to choose one in a hurry just to avoid a few weeks of lost rent – a good tenancy can last a decade or longer! 
To find tenants quickly, use OpenRent.

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This article is not intended to form legal or investment advice. Investments in property are not guaranteed and can decrease in value as well as increase.

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