What Is an Assured Shorthold Tenancy?

Highlights:

An assured shorthold tenancy (AST) is a contractual agreement between a landlord and their tenant.
It sets out the terms and obligations both parties agree to during the tenancy.
Tenancy agreements are usually signed when you move into a property, and can be renewed or changed once the contract period ends.
Fixed-term ASTs are being scrapped under the upcoming Renters Reform Bill. New tenancies will be transferred to periodic rolling contracts.

An AST is a contractual agreement between a landlord and their tenant. It sets out the terms and obligations both parties agree to during the tenancy. This protects both the tenant's and the landlord’s rights, and clearly sets out who is responsible for what at the property.

Tenancy agreements are usually signed when you move into a property and can be renewed or changed once the contract period ends. You’ll need your tenant’s consent if you want to change it before the contract ends.

You can only offer an AST if you fulfill the following conditions:

✔️You are a housing association or private landlord

✔️The tenancy agreement began on or after 15 January 1989

✔️The property is the tenant's main home

✔️You don’t live at the property

Your tenancy is not an AST if:

❌The tenancy started or was signed before 15 January 1989

❌The rent is over £100,000 per annum

❌The rent is under £1,000 per annum in London, or under £250 per annum in the rest of the country

❌The rental agreement pertains to a business property or licensed premises

❌The property is a holiday rental

❌The landlord is a local council

⚠️Regulatory Alert: Fixed-Term ASTs Are Being Scrapped

In May 2023, UK Housing Secretary Michael Gove introduced the Renters Reform Bill to Parliament.

The bill makes several significant changes to the UK rental housing sector in a bid to protect the rights of tenants and landlords.

One of the reforms put forward in the bill is to scrap fixed-term tenancies and put all new tenancies on periodic rolling contracts.

This is to give tenants greater flexibility should their personal circumstances change. It also gives them the opportunity to leave poor-quality housing that is unfit to live in.

The new periodic tenancies can only be ended if the tenant chooses to move out. Landlords can still evict tenants, but only for certain reasons that are defined by law. These include the tenant acting anti-socially, or if the landlord wants to sell the property.

Under the new rules, tenants must give landlords two months’ notice if they wish to move out. This can be given to the landlord at any time and the tenant only has to pay rent until the end of the notice period.

At the time of writing, the Renters Reform Bill is still being debated in the House of Commons. It will then be voted upon and, if successful, will be written into UK law.

When this happens, all existing ASTs will still need to be fulfilled. Once the contract period for the fixed-term tenancy agreement ends, the landlord needs to set up a new agreement under the periodic system.

What Other Types of Tenancy Are There?

Understanding the other types of tenancy that exist can help you to understand which kind is right for your tenant.

Excluded tenancy

This is when the tenant is a lodger who lives with the landlord. It gives them exclusive possession of an area of the property that they pay rent for.

Company let agreement

This is when a company rents your property from you for its employees to live in. The Housing Act 1988 does not apply to corporate tenants, so they have fewer rights governing things like rent increases and evictions.

Non-assured tenancy agreement

This if one or more of the AST requirements listed above aren’t met. For example, if the tenant has a main home elsewhere. Non-assured tenancies don’t require the deposit to be paid into a deposit protection scheme and tenants have less protection from eviction.

How to Create an Assured Shorthold Tenancy

Landlord putting together an assured shorthold tenancy

The easiest way to create your own AST is to get a property solicitor and ask them to do it for you.

This approach is quick, ensures that your tenancy agreement is perfectly tailored to you and your tenant’s needs, and ensures that you get a professional, watertight contract. However, this option is also expensive.

A far cheaper option is to use a template. For example, the UK government website provides a free model tenancy agreement for ASTs.

The model tenancy agreement has been designed for shorthold tenancies with terms of two years or more. You can adjust this to shorter-term tenancies, but this can be hard to do if you aren’t familiar with tenancy agreements.

AST Features

An Assured Shorthold Tenancy Agreement should include the following:

Names of all parties involved in the tenancy
Landlord’s name and address
Address of the property
Length of the contract

Deposits

Your AST should state the amount of deposit the tenant needs to pay. By law you have one month to put this money into a deposit protection scheme and tell your tenant which one you have used. The deposit protection scheme you use needs to be listed in the AST agreement.

Break clauses

A break clause is a contract clause that allows you or your tenant to end the tenancy early.

Usually, they stipulate that you or your tenant can end the tenancy by giving a certain amount of notice after a certain date has passed.

For example, the break clause might say that either party can end the tenancy after six months of a one-year tenancy agreement by giving a one-month written notice.

There are no rules surrounding break clauses, but it’s normal to have an initial period where they cannot be used. This stops either party from ending the tenancy because a better offer comes up.

Rent review clause

You can’t simply increase your tenant’s rent whenever you feel like it. You need to set a time and criteria for reviewing the rent. Often landlords will do this annually and tie it to factors like inflation, interest rates and their own costs.

Your rent review clause should explain:

🔎When you will review the rent

🔎How much notice you’ll give tenants that you are increasing the rent - this needs to be at least one month

🔎How you will calculate the rent increase

Terms

There are a number of terms to include in a tenancy agreement, including:

Tenancy start date
How much rent you need to pay and when
Who has responsibility for repairs or decorating
Who has responsibility for bills
Whether you will allow subletting and lodgers
Whether you will allow smoking in the property
Who is responsible for the garden and external areas
Rules and responsibilities governing shared areas
Rules about smoke alarms
Rules around Barbeques
Whether pets are permitted ot not

Renters Reform: Discrimination protection expanded

By law, your AST must not include anything that discriminates against tenants. This includes:

Their age
Their gender
Their sex
Their sexual orientation
Their marital status
If they are pregnant or on maternity leave
If they have a disability
Their race, including skin colour, ethnic and national origin
Their beliefs

However, the Renters Reform Bill aims to expand this by stopping landlords including clauses that forbid children or pets to live at their properties. This is to make it easier for families to find suitable housing.

Things to Include with an AST

Once your tenant has signed your AST agreement, you are legally required to provide them with the following documents:

📄Gas safety certificate

📄Energy performance certificate

📄How to rent guide

What If I Want to Make Changes to the Tenancy Agreement?

You must get the agreement of your tenants if you want to make changes to the terms of their tenancy agreement. It is illegal to change the agreement without their consent.

Landlord AST Obligations

As a landlord providing an AST, you will be expected to:

✔️Follow correct eviction procedures when required

✔️Protect your tenants’ deposits

✔️Arrange an annual gas safety check

✔️Keep the house habitable and in a good state of repair

✔️Adhere to the rent outlined in the AST

✔️Provide tenants with at least 24 hours’ notice before visiting the property, and respect their right to privacy

Tenant AST Obligations

✔️Pay the rent in full and on time when required

✔️Treat the property well

✔️Report any problems to the landlord

✔️Behave in a way that doesn’t upset other tenants or neighbours

✔️Don’t break the law while in the property

✔️Give the appropriate notice when it is time to move out

Ending an Assured Shorthold Tenancy

There are several ways that ASTs can end. The most common are:

The fixed term comes to an end

When this happens there are three options:

The tenant moves out
You and the tenant agree to sign a new fixed-term contract
The tenant continues living at the property and the tenancy automatically switches to a rolling periodic tenancy

You or your tenant triggers a break clause

This needs to happen after the agreed period has expired. You or your tenant need to give the required notice.

You issue a Section 21 notice

This is obtained via the courts to evict the tenant and regain possession of the property. They are sometimes called “no-fault” evictions because the tenant doesn’t have to have done anything wrong to be issued with one.

You issue a Section 8 notice

This is also obtained via the court. It is used when the tenant has broken the terms of their AST agreement and you want to evict them.

Joint tenancies

If you have joint tenants and one of them wishes to leave during the tenancy then they still need to pay you rent. You may agree to release them from the contract. If you do, the current joint tenancy will come to an end and you will need to issue a new contract to the remaining tenants.

For more information, check out our article on joint tenancies.

What if my tenant refuses to leave the property?

You cannot remove your tenants by force. If the notice period expires and your tenants do not leave the property, you can start the process of eviction through the courts.

Make Managing Your Properties Easier with EVO

One of a landlord’s main responsibilities under an AST agreement is keeping their property well maintained. This is where EVO can help.

Our digital platform takes the hassle out of managing repairs and maintenance by connecting landlords, tenants and tradespeople. Our service is a fully managed end to end repairs and maintenance service including emergency cover.

✔️Rapid reporting: Your tenants can quickly and easily report a problem via the EVO app which includes all the information needed to complete the repair.

✔️ ️Fast response: Once a problem is reported it is assigned to the next available suitably qualified tradesperson.

✔️Manage all repairs: Our landlord dashboard allows you to see what repairs are being made, at which property, when and by whom. This ensures you never lose track of your repairs and maintenance.

✔️Helpdesk: There to help with all repair and planned maintenance needs fast.

✔️Repairs: Certified trades available 24 hours a day, ensuring a fast response and quality workmanship. EVO warranty all work for 12 months.

✔️Reminders: Ensuring that nothing falls through the cracks.

✔️Service history: All jobs and services are logged and easily accessible, with completion notes and images.

✔️Compliance: Gas safety compliance, electrical testing and more, with digital records and service reports all in one place.

✔️Emergency cover: Providing trustworthy 24/7 emergency services in case of serious issues.

Get in touch to find out how we can help take the stress and hassle out of being a landlord.

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