Through the introduction of assured and assured shorthold tenancies, the Housing Act 1988 aided the ending of the lengthy decline in the private rented housing market which had occurred post-war. Levels of rent and the freedom of landlords had been tightly constrained by the Rent Acts, but assured and assured shorthold tenancies have restored a significant degree of control to landlords.
Under an assured tenancy the tenant has security of tenure, but the landlord is able to charge a market rent and to regain possession according to certain grounds that are laid out in the Housing Act 1988.
An assured shorthold tenancy has an additional grounds for possession; the landlord is guaranteed possession after an initial agreed period (the shorthold period) of usually 6 months.
Assured shorthold tenancies were designed to encourage short term letting at a time when the risks of letting and the difficulties of recovering possession caused many landlords to be reluctant to let property. They allow the landlord to let his property for only a short time, and to automatically recover it after six months if they choose to. Consequently, it does not offer much protection to the tenant after the first six months of their tenancy.
Important changes were then made by the Housing Act 1996 and, since 28th February 1997, except in certain circumstances, all tenancies set up are automatically assured shorthold tenancies. A tenancy will not be assured if:
- the tenancy began before 15th January 1989
- it is a letting to a company (because an assured tenant must be an individual)
- it is a business or holiday let
- no rent or very low rent is charged
- the rent charged is very high (currently over £100,000 per year)
- the landlord is a resident landlord
- the dwelling house is let with over two acres of agricultural land
- the tenancy is an agricultural holding or occupancy
These tenancies will operate outside the control of the Housing Act 1988.
Tenancies granted before 28th February 1997 are assumed to be an ordinary assured tenancy. They will not be an assured shorthold tenancy unless the landlord served a special notice, a ‘Notice of Assured Shorthold Tenancy’ (otherwise known as a Section 20 notice), that the tenancy was to be an assured shorthold.
If a landlord lets a property on an assured shorthold tenancy, he is entitled to regain possession at the end of the term subject to the statutory notice requirements:
- the landlord must give 2 months notice that possession is required
- the term of the tenancy must be at least 6 months before possession will be awarded
However, the tenant may be able to apply to the first-tier tribunal (England) or the rent assessment committee (Wales) to have the rent reduced if he considers the rent to be significantly higher than that for comparable tenancies in the area. They may do this only once, and this must be within the first six months of the original tenancy.
Since April 2007, deposits taken in relation to assured shorthold tenancies must be held under a government-authorised protection scheme