The tenant can argue that they can't find anything comparable for the price they are paying and so they are entitled to stay for at least 3 years. This seems absurd if I am taking out a mortgage and I cant live in it and they are able to stay and pay under market price for rent. Is this really the case??
Yes, there are more and more stories similar to this. If you buy to rent, assume your tenant has a 3 year contract. Then you won't be disappointed.
You might be ok with something like a 1 year fixed term contract if it's made absolutely clear, in writing, in triplicate. But you might not, if you get a tenant who wants to be difficult in a years time.