Changes to AST thresholds from £25,000 to £100,000

Mar 23rd 2010

Change to Assured Shorthold Tenancy threshold
To be applied retrospectively in October 2010

The Government has announced that the threshold for Assured Shorthold Tenancies (ASTs) will increase from £25,000 to £100,000 this October.

At the moment any residential tenancy in England and Wales with an annual aggregated rent over £25,000, (the total rent due per year), cannot be an AST.

The Government announced last week that it intends to increase the threshold to £100,000, to reflect changes in market rents and to ensure that minimum legal tenancy requirements are met. 

The new threshold is expected to come into effect from 1 October 2010 and will apply retrospectively. This means that any new or existing tenancies with a total annual rent of £100,000 or less, will become an AST by default (provided no other relevant exemption applies).

This change may particularly affect large shared houses (where tenants have signed one tenancy agreement), family homes and luxury lets, where the annual rent exceeds £25,000.

Landlords affected by this change will need to make sure any tenancy deposits are protected* and will only be able to legally terminate the tenancy by using the Section 8 and Section 21 possession routes.