Beware of High Rents in London Flats

There is small legal protection for tenants when letting the flats and houses at the high rents, particularly in central London

There is small legal protection for tenants when letting the flats and houses at the high rents, particularly in central London. However, many property owners, tenants and property professionals are not aware of this. They do not know how an escape in the law affects thousands of people renting an accommodation in London, U.K.

Perhaps the buy-to-let detonation, of which London property has been at the top position, started to come into strength of the Housing Act 1988. Hotly debated by the parliament, the Act introduced an innovative new form of tenancy accord, giving private property owners the certainty that they could get back ownership of their house or flat at the end of the tenancy without any legal limitations, which had strangled the private rented segment for so many years. The Assured Short hold Tenancy (AST) opened the rental market to throng the private investor.

The AST attempts to balance the requirements and gives some protection to the tenants. With the government's plan of making it easier for property owners to let out the property, they provide the inexpensive rented accommodation. Under an AST, a court is not allowed to make an order for reclamation within the first 6 months of the tenancy. After 6 months, reclamation can only be ordered on a particular constitutional ground.

There are certain legal requirements of an AST. With all tenancies, the property should be self-controlled. The other major conditions are the following:

(A) The property should be the tenant's main home (no holiday lettings)

(B) The property should let to individuals (i.e. no companies) and

(C) The annual rent should not exceed 25000 pounds.

The restrictions are overlooked by the property owners, leasing agents and lenders alike, predominantly in London where rents over 480 pounds per week (25000 pounds per annum) are relatively common. It could not rent under an Assured Short hold Tenancy (AST) when five people share a house and pay a rent of 100 pounds per week each because the total rent would exceed the statutory maximum. Agents are not aware of the limits. They only use their standard form of Assured Short hold Tenancy, inserting whatever rent has been decided.

Including the restrictions on their terms and conditions that the property must be let under AST, many buy-to-let lenders will cheerfully assess loans on declared rents well over 480 pounds per week. One who is not assured of short holds such as residential tenancies, are likely to be classified as "ordinary" and "common law" tenancies.