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News release

AST threshold will increase to £100k in October...and it will be retrospective

12 March 2010

The Government has informed the National Landlords Association that on 1 October 2010 the Assured Shorthold Tenancy (AST) threshold will rise to £100,000. The rise will apply retrospectively.

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.

For reasons the government has not fully explained, it seems that a quirk of the process means the change will be retrospective and will be applied to existing tenancies.  As a result, any tenancy with an annual rent between £25,000 and £100,000 in existence on 1 October 2010 will become an AST overnight.

Landlords and tenants will no longer be able to negotiate individual terms for their tenancy and the rights and responsibilities associated with the Housing Act 1988 will be extended to these higher rent properties.

David Salusbury, Chairman, NLA, said:

“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. For example, landlords in this higher rent bracket will have to protect deposits for the first time. If they fail to do so by October 1 2010 they could be in breach of the law. We are told the courts are being forewarned.

“The NLA believes the Government is rushing through this change without fully thinking through the consequences.  We call for greater consultation to ensure this measure does not have a negative impact on the private-rented sector. We will continue to provide the most up-to-the minute help and advice on the issue to landlords. We have published a guide to help landlords comply with the law and will continue the press the Government for further consultation.”

Download the Q&A for landlords [ 93KB].

All media enquiries including enquiries for interviews:

Ellie Irwin
Press Officer, NLA
Email:
Tel: 020 7840 8925
Mob: 07833 683 281

Notes to Editors:
Representing landlords from all over the UK, the National Landlords Association (NLA) is the leading organisation for private-residential landlords. It campaigns for the legitimate interests of landlords by seeking to influence decision-makers at all levels of government and by making landlords’ collective voice heard in the media. The NLA helps landlords make a success of their lettings business by providing a wide range of information, advice and services. It seeks to raise standards in the private-rented sector while aiming to ensure that landlords are aware of their statutory rights and responsibilities.