Higher rent limit for assured shorthold tenancies

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06 October 2010
A reminder that the rent limit for assured shorthold tenancies of residential premises in England increased from £25,000 to £100,000 per annum on 1 October. Any existing lease for a term of less than 21 years at a rent of between £25,000 and £100,000 became an assured shorthold tenancy on that day, with the consequence that:
  • Housing Act 1988 requirements must be followed in order to terminate the tenancy or increase the rent payable under it, nothwithstanding the terms of the lease document. For example the landlord must give at least 2 months notice to determine the tenancy.
  • Any landlord's notice to quit already given before 1 October to terminate the tenancy after that date may well be ineffective at law and a fresh Housing Act notice will have to be served.
  • If a rent or damages deposit has been taken, then if the tenancy is renewed the deposit must be returned or held in accordance with one of the authorised tenancy deposit schemes.

The increased threshold is to reflect the assumption underlying the Housing Act that tenants able to afford prestige properties at very high rents do not require the same protection as more "ordinary" tenants. When the threshold was originally set at £25,000 very few leases reserved that level of rent but increasing rental values mean that such rents are becoming almost commonplace for properties in some areas.

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