What is the Difference between Assured Tenancy and Assured Shorthold Tenancy?

Throughout this blog post, we discuss the differences between assured tenancy's and assured shorthold tenancy's as it is important for landlords to be fully aware when diving into the world of lettings.

Within the residential letting market today in the UK, the most popular type of tenancy agreement is an assured shorthold tenancy (AST). If you are looking to invest in property with a view to letting out to tenants, it is important that you understand the different tenancy agreements available. Residential Estates understands the market inside and out, with an extensive portfolio that helps our clients find the perfect property, in the perfect location to match their needs and explain what our clients need to know before entering the world of being a landlord.

Below we take a look at the differences between an assured tenancy and an assured shorthold tenancy to help you be more informed. Since 1997, any new tenancy is automatically an assured shorthold tenancy, unless the landlord states otherwise by serving a notice. It is still important as a landlord to understand the difference between the two.

What is an Assured Tenancy?

With an assured tenancy issued by a private landlord, the tenant has long term tenancy rights. This means that they are protected under the Housing Act 1988, and cannot be evicted from the property unless there are legal, reasonable grounds to do so. A tenant under an assured tenancy can also challenge any unreasonable changes in rent before a rent assessment committee. This is the case for tenants who moved into their property between 15th January 1989 and 27th February 1997, although it can also apply to those tenants who moved in after 27th February 1997, as long as they received written notice from the landlord that they were under an assured tenancy. It could also be that the tenant previously had an assured tenancy in the same building, with the same landlord.

There are a few types of tenancies that cannot be assured, including student halls, properties that have rental figures above £100,000 per year, business tenancies, holiday lets, or agricultural property.

An assured tenancy is either on a fixed-term basis or runs on a periodic tenancy, where it rolls from month to month or even week to week in some cases. If you would like to end an assured tenancy (as either a tenant or a landlord), there must be a ‘surrender’ or agreement between both parties, where an official notice has been given to end an assured tenancy. The tenant serves the appropriate notice within their lease, or the landlord begins the proper eviction process. Tenants living under a periodic tenancy are required to give written notice to the landlord to end the tenancy.

What is an Assured Shorthold Tenancy (AST)? 

This type of agreement is less long term. The principal difference between an assured shorthold tenancy and an assured tenancy is the limited security of tenure an assured shorthold offers the tenant. This is often seen as positive for the landlord as unforeseeable things can happen that may make you wish to sell or change the use of a property. An Assured Shorthold Tenancy allows the landlord to evict the tenant after an initial fixed term without the requirement of a proper legal reason to do so. In the vast majority of cases these days, this fixed-term period is 6 months.

Any person applying for a buy-to-let mortgage must provide a copy of the Assured Shorthold Tenancy to the mortgage lender so that they can check they are happy with the terms.

Under an Assured Shorthold Tenancy agreement, there are a few different stipulations to rent increases by the landlord. There must be a rent review clause written into the tenancy agreement, the tenant must agree to this rent increase and there must be at least one month’s written notice before the rent increase takes place. There cannot be a rent increase however, within the initial fixed term tenancy, giving the tenant some peace of mind.

The landlord on an assured shorthold tenancy is responsible for the vast majority of repairs and maintenance, including external repairs to the walls, guttering, windows, and roof. They are also responsible to fix any major issues with water, gas, or electricity. Any minor repairs, such as fire alarm batteries, light bulb replacements and fuses, are the responsibility of the tenant.

Residential Estates are experts in the field of property investment. If you are looking to find the perfect property to let out to tenants, we can help. Our team understands the market inside and out and we also have a selection of short term lets available for those seeking a short break or a place to live whilst working a short term contract. To find out more information, please feel free to contact our friendly team on 01244 343 355 or sales@residential-estates.co.uk.

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