Government consultation on longer terms for ASTS

At the start of July the Ministry of Housing, Communities & Local Government (MHCLG) launched a consultation to gather views on how to overcome the barriers to longer tenancies in the private sector. The prompt for the consultation is that since the assured shorthold tenancy (AST) was introduced in the Housing Act 1988 the use of ASTs (which have a minimum fixed term of six months) has grown hugely and they are now the most common tenancy in the private rented sector, which now houses 20% of all households.

The MHCLG is concerned about tenants having a lack of security in their living arrangements as ASTs can, theoretically, be terminated fairly easily after the expiry of the fixed term, which in many cases is only six months.

The MHCLG is therefore gathering views on a proposal for all ASTs to have a minimum fixed term of three years. The idea being that this will benefit both landlords and tenants in some of the following ways. Tenants will have greater security, be happier to complain if their accommodation is sub-standard without the concern of being evicted, and as they will be moving less will have reduced moving costs. Landlords will be able to tie in tenants for longer periods which may result in fewer empty properties and reduced letting agent fees for landlords. The MHCLG also suggests that tenants might look after properties better if they know they are going to be in occupation longer term.

The proposal is for all ASTs to have a three year fixed term but with a six-month break on both sides (where neither party has to stipulate any grounds for the break). Once the initial six months passes, however, the landlord will only be able to terminate the AST on the grounds set out in Schedule 2 of the Housing Act 1988 but the tenant will be able to break on giving two months’ notice.

The full consultation can be found here:

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