Assured Shorthold Tenancy Threshold to Rise

The government has announced through the National Landlords Association (NLA) that the threshold for Assured Shorthold Tenancies (ASTs) will rise from £25,000 to £100,000 and will be applied retrospectively from 1 October.

Under the changes, any tenancy with an annual rent between £25,000 and £100,000 in existence on 1 October will become an AST overnight. Landlords and tenants will no longer be able to negotiate individual terms for their tenancy as the rights and responsibilities associated with the Housing Act 1988 will be extended to these higher rent properties.

The proposal to increase the AST threshold had been broadly welcomed as an attempt to offer greater clarity and transparency for landlords and tenants. However, the NLA believes the proposals have the potential to be damaging to a significant number of landlords who entered into contractual tenancy agreements in good faith.

“Although we are still piecing together the facts, the retrospective nature of this change is highly regrettable, and it could have a wide-ranging impact on the letting of private residential property,” argued NLA Chairman, David Salusbury.

For the first time, landlords in the higher rent bracket will have to protect deposits and if they fail to do so by 1 October they could face heavy fines for breaching the law.

Since April 2007, a landlord under an AST Agreement must protect any deposit received under one of the Tenancy Deposit Protection Schemes (TDPS), and also provide information of the scheme to tenants within 14 days of the deposit receipt.

“The NLA believes the Government is rushing through this change without fully thinking through the consequences,” added Mr Salusbury. “We call for greater consultation to ensure this measure does not have a negative impact on the private-rented sector.”