AST contracts are going to be removed by the Renters’ Rights Bill as soon as this summer.
The proposed legislation outlines several ways in which it is going to change the private rental sector, and one of the biggest ones is the removal of AST tenancies.
ASTs or ‘Assured Shorthold Tenancies’ are the current industry standard contract type in the UK, they work by granting a tenancy on a fixed term, usually 6-12 months.
New tenancy system
The new tenancy system essentially converts all existing tenancies onto a periodic tenancy, it will also serve as the new industry standard, so any tenancies created from the date of implementation will be periodic.
Periodic tenancies function on a rolling basis, where the tenancy rolls over month-to-month, and as there is no fixed term, the tenant can stay for as long as they want/need.
This new tenancy structure will be “simpler” and will provide “more security to tenants” according to the government and is also intended to grant stronger protections against backdoor evictions.
Impact on the sector
Though the new tenancy reforms will have a pronounced impact on the dynamic between landlords and tenants, they come alongside new redefined grounds for possession, such as:
- A ban on Section 21 notices.
- Adjustments to section 8 (20 new added grounds).
- And a 12-month protective period for tenants, where they cannot be served any ‘no-fault’ notices for 12 months.
- & much more
The sector’s reaction to this change has been mixed:
Those in favour of the removal of ASTs say that it facilitates a tenant’s ability to leave a property, giving them greater control over their tenure,
However, others argue that a fixed-term contract is a reassurance to both tenant and landlord that there is a mutual desire to continue the agreement, which creates a better sense of security in the tenancy.
When will it come into force?
As of the writing of this post, the Renters’ Rights Bill is currently in the House of Lords awaiting the next step: the Committee Stage.
At this rate, we can expect to see the bill receive Royal Assent shortly after Easter, when it will formally become law.
The commencement date will follow thereafter, likely between summer and autumn.
If you have questions about the Renters’ Rights Bill or are interested in property management services, get in touch with us today and let’s discuss your assets.