Leasing vs an AST: Why More London Landlords Are Choosing a Lease-Based Arrangement

For many years, an Assured Shorthold Tenancy was the standard route for letting a property in England. A landlord would find an individual tenant, agree a rent, manage the tenancy and respond to issues as they arose.

That model has now changed.

Since 1 May 2026, new private residential tenancies in England are generally assured periodic tenancies rather than fixed-term ASTs. Existing ASTs have also moved into the new framework. Section 21 no-fault evictions have been abolished, and landlords must rely on specific Section 8 grounds when seeking possession.

This does not mean direct letting is no longer possible. It does mean that many London landlords are reviewing how they want to operate.

A lease-based arrangement can offer a different approach. Instead of letting directly to an individual tenant, you lease your property to a provider such as RNS Homes. The provider becomes your contractual tenant for an agreed term and manages the property and its occupants.

For landlords who value predictable income and minimal involvement, this can be a practical alternative to the traditional AST route.

What Is A Lease-Based Arrangement?

With a lease-based arrangement, you enter into an agreement with a company or housing provider rather than directly with an individual household.

The provider becomes your single contractual counterparty. It then manages the occupation of the property, including tenant sourcing, communication, inspections and day-to-day issues.

Depending on the arrangement, the property may support council referrals, public sector housing needs or other suitable occupiers. The precise legal structure depends on the provider, the property, the intended use and the terms of the agreement.

The important difference is operational:

• You deal with one professional organisation.
• You receive an agreed monthly rent.
• The provider manages the occupants.
• The agreement runs for an agreed period, often three to five years.
• Your responsibilities are clearly set out in the contract.

A lease-based arrangement does not remove every legal or ownership responsibility. Building insurance, major structural works, freeholder obligations and certain property compliance duties may remain with you. A reputable provider will explain these responsibilities clearly before you commit.

Why The Traditional AST Route Is Changing

The Renters’ Rights Act 2025 introduced important changes for private residential landlords in England.

New fixed-term ASTs are no longer available for most new private residential lettings. Instead, assured periodic tenancies provide tenants with greater ongoing security. Section 21 has also been removed, meaning landlords must use a valid Section 8 ground to regain possession.

Landlords must therefore manage a tenancy that may continue on a rolling basis. Rent increases, possession procedures and tenant communications must be handled carefully.

These reforms are designed to improve security for renters. They also create a more structured compliance environment for landlords.

You can read more in our wider coverage of the Renters’ Rights Act and guaranteed rent schemes. Our previous articles on the true cost of a void period and guaranteed rent explained also cover the financial and operational issues that influence this decision.

Fixed Monthly Income Without Void Risk

One of the main advantages of leasing your property to a provider is income certainty.

With direct letting, your income can be affected by:

• Empty periods between tenants.
• Rent arrears.
• Delayed possession.
• Re-letting costs.
• Seasonal demand.
• Unexpected maintenance expenditure.

Under a guaranteed rent scheme, the provider pays an agreed monthly amount for the term of the lease. This means your income does not stop simply because the property is temporarily unoccupied or an end tenant falls behind.

At RNS Homes, our guaranteed rent service provides fixed monthly income for up to five years, regardless of occupancy or voids. The rent we offer is the rent you receive. There are no management fees deducted from that agreed amount.

This can make it easier to plan for:

• Mortgage payments.
• Portfolio costs.
• Refurbishment projects.
• Tax planning.
• Long-term investment decisions.
• Household or retirement income.

Predictability is particularly valuable when you own several properties or need reliable cash flow each month.

One Professional Counterparty Instead Of Multiple Tenants

Direct letting usually means dealing with individual tenants throughout the tenancy. You may need to answer questions, arrange access, chase rent, organise repairs and manage disagreements.

A lease-based arrangement gives you one professional counterparty.

The provider manages communication with the occupants and takes responsibility for the agreed day-to-day service. You have a clear point of contact and a defined process for reporting issues.

This can be especially helpful if you:

• Live outside London.
• Own a property from overseas.
• Have a busy professional schedule.
• Manage a wider portfolio.
• Have experienced difficult tenant communication in the past.
• Do not want rental management to become a second job.

With RNS Homes, our team handles tenant screening, property management, maintenance coordination and routine communication. You remain informed without needing to manage every operational detail yourself.

Less Day-To-Day Management

Leasing your property can reduce the practical workload associated with direct letting.

The provider can coordinate:

• Tenant sourcing and screening.
• Check-in arrangements.
• Property inspections.
• Maintenance reporting.
• Contractor access.
• Occupier communication.
• Rent collection from the provider’s occupants.
• Compliance coordination within the agreed service.

This does not mean the property is left unattended. A professional lease-based provider should have established processes for inspections, repairs and reporting.

Our property management service is designed to give landlords a fully managed, hands-off experience. We monitor properties, respond to issues and coordinate maintenance without charging a separate management fee.

A More Manageable Compliance Relationship

The Renters’ Rights Act has increased the importance of careful tenancy management.

When letting directly, you remain closely involved in the assured tenancy process. This includes understanding periodic tenancies, permitted rent increase procedures, possession grounds and the correct steps for dealing with arrears or breaches.

A lease-based arrangement can move much of the operational burden to the provider. You have a contractual relationship with the provider, while the provider manages the occupation of the property under its own established procedures.

The exact legal position depends on the agreement and how the property is used. A lease should never be treated as an automatic exemption from all housing, safety or licensing requirements.

However, working with an experienced provider can give you:

• A clear contractual framework.
• A professional point of contact.
• Defined responsibilities.
• Coordinated compliance processes.
• Less direct involvement in end-tenant management.

This can provide valuable support in the post-Renters’ Rights Act environment.

Lease-Based Arrangement Vs Traditional AST Letting

Area	Traditional AST or direct letting route	Lease-based arrangement
Rent certainty	Rent may be affected by voids, arrears and re-letting	Fixed monthly rent for the agreed term
Voids	Usually the landlord’s responsibility	Usually covered by the provider under a guaranteed rent agreement
Management	Landlord or agent manages the individual tenancy	Provider manages occupants and day-to-day issues
Compliance burden	Landlord must manage the assured tenancy framework and possession process	Provider manages agreed operational responsibilities, while ownership duties may remain with you
Term length	New private tenancies are generally periodic	Agreements commonly run for three to five years
Control	Greater direct control over tenant selection and access	Less direct control over who occupies the property
Costs	Possible agent fees, void costs, re-letting costs and maintenance charges	No management fee with RNS Homes; ownership and agreed property costs still apply
Property condition	Depends on the tenancy and management process	RNS Homes guarantees the property condition on return, subject to the agreement

The Honest Trade-Offs

A lease-based arrangement is not right for every landlord.

The agreed rent may be below the absolute open-market peak. However, the comparison should include the full financial picture. With RNS Homes, there are no management fees, no void deductions and no re-letting costs during the agreed term.

You may also have less direct control over who occupies the property. The provider selects and manages occupants within the agreed arrangement.

A longer agreement can make it more difficult to sell the property or move back in during the term. You should review any break clause carefully and understand the conditions before signing.

You will also normally retain ownership responsibilities such as:

• Buildings insurance.
• Major structural works.
• Freeholder obligations.
• Mortgage requirements.
• Certain licensing or safety responsibilities.
• Repairs specifically excluded from the provider’s agreement.

A clear contract matters. Ask questions before you commit, and make sure the responsibilities of both parties are recorded in writing.

Who Does Leasing Suit Best?

A lease-based guaranteed rent scheme may suit you if you:

• Own a property that is difficult to let consistently.
• Have experienced costly void periods.
• Live overseas or outside London.
• Manage several properties.
• Want predictable monthly income.
• Prefer not to deal with tenants directly.
• Want a longer-term arrangement of up to five years.
• Need a professional partner to coordinate maintenance and inspections.
• Want your property to support council or public sector housing needs.

It may not suit you if you need to sell or occupy the property soon, want complete control over every occupant or are focused only on achieving the highest possible open-market rent at any point in time.

The right choice depends on your priorities, property type and investment plans.

Supporting London Housing Need

A lease-based arrangement can also support wider housing needs.

RNS Homes works with London councils and public sector organisations to provide suitable homes for households who need stable accommodation. Through our social housing solutions, landlords can receive dependable income while their property contributes to local housing provision.

We have managed more than 300 properties since 2020. Our approach combines guaranteed rent, full property management and clear communication with landlords.

Your property can provide a reliable return while serving a practical community purpose.

Request A Free Rental Assessment

Are you considering a guaranteed rent scheme in London?

Tell us about your property and our team will provide a free rental assessment. We will explain the proposed rent, agreement length, management responsibilities and next steps clearly.

There is no pressure to proceed. You can ask questions before making a decision, and our experts will help you understand whether leasing is suitable for your circumstances.

Request your free rental assessment today. Our team will be in touch within one working day, so you can review your options with clear information and professional support.