When to serve notice on your rent
Updated: 18th Sep, 2024
Author: Charlotte Burton
If you are currently renting, it can be difficult to coordinate ending your tenancy with moving into your new home. The most important thing to start with is checking how your tenancy contract allows you to end your tenancy. Then, you need to think about what date to serve notice on your rental. You should wait until your exchange date to serve notice if you possibly can. However, some tenancy contracts will make this very difficult financially.
đ Review your tenancy contract
Most people who rent from private landlords have an âassured shorthold tenancyâ. Most of those start with a fixed period of 6 or 12 months. At the end of the fixed period, you can either leave, agree to another fixed period, or move onto a rolling contract, often called a periodic tenancy.
If you are on a rolling contract, you only have to give 1 monthâs notice to your landlord in order to end the tenancy.
If you are still within the fixed period of a tenancy, with 2+ months left to go on the fixed period, leaving is more complicated. Check if your contract has a break clause, allows you to assign the tenancy to someone else, or allows you to sublet. If it does not, talk to your landlord. Otherwise, you have no choice but to pay rent until the end of the fixed period đ±
- A break clause within your contract allows you to leave a fixed period tenancy early.
- It will often have a specific time when it can be used, e.g. not before 6 months into the tenancy, or even, at 6 months in only.
- The clause will also state the notice period you have to give before leaving.
- If you can't see a break clause in your contract, you can ask your landlord if they'd be willing to allow you to leave early & explain the situation. They may not agree to this, but there are other options.
- Your contract may allow you to transfer the lease to a new tenant (called assignment). The new tenant would be responsible for paying the remainder of your fixed period.
- Or, the contract might allow you to sublet the property. Subletting is where you are still responsible for paying the landlord, but someone else can live in the property and pay you. If the subletter stopped paying you, you would still need to pay the landlord the rent.
- You will normally have to find your own replacement tenant or subletter in these situations, and will probably need permission from your landlord.
- If your contract doesnât mention these options, you can ask your landlord whether they would be possible. However, the landlord does not have to agree if they are not in the contract.
đ When should I serve notice on my rental?
You should wait until exchange of contracts has happened before serving notice on your rental if you possibly can.
Before exchange, there is no guarantee that the sale of the home will go through, as no one is legally committed to the sale until exchange. The date you get the keys (completion) also isnât guaranteed until exchange, when it is legally agreed.
If you hand in your notice on your rented property before exchange, you are taking a risk that you could end up with nowhere to live if the sale fell through, or was delayed.
If this happened to you, you could:
- Find temporary accommodation. This can be expensive.
- Ask friends or family to put you up for a while. You would still have to take the time (and possibly pay) to move all your possessions out of your rented place, and then a second time into your new home when the sale goes through.
- Find a new place to rent. You would probably get locked into a fixed period of tenancy, making this very expensive if the sale of your home was only delayed by a few weeks.
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đžDoes that mean I have to pay both rent & mortgage for a while?
Not necessarily, though it will depend on the tenancy of your rented place.
Let me explain:
- Exchange is not the day your mortgage starts.
- Completion, which tends to happen 1-4 weeks after exchange, is the day your mortgage starts (or a few days earlier, when your conveyancer gets the money from your lender). But completion is not the day you make your first mortgage payment.
- The month after completion is when you make your first mortgage payment.
The key part is that your mortgage comes out at the end of the month, whereas in most cases rent is paid at the start of the month. This means that even if your rent & mortgage are overlapping for 1 month, i.e. the end date of your rental is 1 month after completion date, you wonât pay out the cash for both at the same time.
Remember that youâre handing in your notice at exchange, not completion. You can ask for time between exchange & completion to start the clock ticking on your notice period before your mortgage starts (on completion), reducing the overlap between your rent & mortgage.
Unless your notice period or remaining fixed period is 2+ months, or you want to do major renovation work on your new home that will take more than 1 month, you wonât have to pay rent & mortgage at the same time.
â More example scenarios
Ask for 4 weeks between exchange and completion when you are agreeing dates. If you serve notice on your rent at exchange, this will reduce how many months youâll have to pay out both rent & your mortgage (to 0 months if you have 2 monthâs notice period).
The seller and the rest of the chain may not agree to 4 weeks, but the longer you can negotiate that period to be, the less overlapping rent & mortgage youâll have to pay.
If you have more than 2 months left of rent to pay and canât afford any time where you pay both rent & mortgage, youâll need to carefully consider what to do. If youâre still in the fixed period of your rental, look into whether you have a break clause, or mention of subletting or assignment of tenancy within your contract, and talk to your landlord.
Hand in your notice on your rent as soon as everything has gone through on exchange & completion day.
If you only have 1 monthâs notice on your rent, you will likely not have overlap between paying out the cash for rent and your mortgage.
If you have longer than 1 monthâs notice period or remaining fixed period, you will have an overlap between your rent & your mortgage payments. You can still renegotiate to get time between exchange & completion to reduce this overlap, as dates are only set in stone at exchange.
