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What exactly is an Assured Shorthold Tenancy?

For sale and to let boards outside Victorian terrace in Battersea

An Assured Shorthold Tenancy or an AST is currently the default form of tenancy in England between private landlords and housing associations, and tenants.

ASTs became the default tenancy after the implementation of the Housing Act 1996, following on from the Housing Act 1988 which completely overhauled the private rented sector. ASTs offer no long-term security of tenure to renters, and make it easy for landlords to evict tenants without giving a reason, using Section 21.

Assured Shorthold Tenancies are now the default tenancy in the private rented sector in England. They were also the default tenancy in Wales before Occupation Contracts were introduced on 1 December 2022.

However, Assured Shorthold Tenancies are due to be abolished in England when the Renters Reform Bill comes into effect, and replaced with Assured Tenancies.

>> Related Post: Renters Reform Bill Hub

>> Related Post: Renters Reform Bill Timetable: What happens when?

What are the requirements for an AST?

These are the requirements for a letting arrangement to be an Assured Shorthold Tenancy in England:

  • The tenancy started on or after 15 January 1989.
  • The property is the tenants’ main or sole home.
  • The landlord does not live in the property.
  • The rent must be more than £250 a year (£1,000 in London), and under £100,000.
  • It must not be a business tenancy or a holiday let.
  • The tenant cannot be a company.

What is the difference between Fixed Term and Periodic Tenancies

Assured Shorthold Tenancies tend to have an initial fixed term period of six or twelve months, after which the parties can renew the agreement for a further fixed term. This is called a Fixed Term Tenancy.

If a fixed term tenancy isn’t renewed for another fixed term, assuming the rent is paid monthly, the tenancy will convert automatically to a rolling monthly contract, called a periodic tenancy.

Although most ASTs will have an initial fixed term, they can also be a periodic tenancy from the start, running on a week-by-week or (more commonly) a month-to-month basis.

The tenant can then terminate the tenancy by serving one month’s notice, whereas the landlord needs to give a minimum of two months’ notice under Section 21 of the Housing Act 1988, assuming their paperwork is in order. Otherwise they’ll need to use Section 8 to terminate the tenancy.

Fixed term tenancies will be abolished by the Renters Reform Bill, although the minimum term will be six months as tenants won’t be able to terminate in the first six months of a new tenancy.

>> Related Post: A Guide to Periodic Tenancies in England

Can short term lets be Assured Shorthold Tenancies?

Short term lets are usually lets for a period under 6 months. Contrary to popular belief, it is possible for a short term let to be an assured shorthold tenancy if the tenants are individuals (not a company), it’s their sole or main home, the rent is over £1,000 pa in London and £250 pa outside of London, and it’s not a holiday let or a business tenancy.

For a short term let to be a holiday let (and therefore not an assured shorthold tenancy), the visitors must genuinely be on holiday.

>> Useful Resource: Government Guidance on Furnished Holiday Lettings (2023)

What’s the equivalent of tenancy agreements in Wales?

On 1 December 2022, tenancy agreements in Wales were replaced by occupation contracts. They’re pretty much the same as ASTs, apart from the nomenclature. But the devil’s in the detail and the transition arrangements are complex.

>> Related Post: Landlord Guide to Occupation Contracts in Wales

How will the Renters Reform Bill affect Assured Shorthold Tenancies?

man reading on an ipad renters reform bill clause 2 abolishing assured shorthold tenancies
The Renters Reform Bill contains a clause abolishing assured shorthold tenancies.

When the Renters Reform Bill comes into effect, all new tenancies will become periodic assured tenancies, and Assured Shorthold Tenancies will be abolished. This is likely to be at least six months after the Renters Reform Bill receives Royal Assent.

For those assured shorthold tenancies that are already in place, they will automatically convert to assured tenancies on the second implementation date. They’ll automatically become periodic tenancies (and not for a fixed term) after this date. Any clause in a tenancy agreement which attempts to create a fixed term will be invalid. However, the minimum term will be effectively six months as tenants won’t be able to terminate a tenancy in the first six months.

Government guidance says that the second implementation date will be at least 18 months after Royal Assent. Assuming Royal Assent is given in the autumn of 2024, this means it’s likely in 2026: Renters Reform Bill Timetable: What Happens When.

>> Related Post: How to get ready for the Renters Reform Bill

what is an assured shorthold tenancy
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