Introduction: Why £100,000+ Tenancies Demand Extra Attention
In the world of prime central London real estate, rental agreements at £100,000 per annum and above are increasingly common. But many landlords — even experienced investors — misunderstand how Assured Shorthold Tenancies (ASTs) operate at this level. Missteps can expose you to legal, financial, and operational risks. This guide explores the key issues and best practices to protect your investment.
What Is a High-Value AST?
An Assured Shorthold Tenancy (AST) is the standard form of residential tenancy in England. However, under the Housing Act 1988, tenancies with annual rent exceeding £100,000 fall outside AST protection and become non-Housing Act tenancies.
For landlords charging exactly £100,000, the tenancy may still qualify as an AST — but the moment rent rises above this threshold, the legal framework changes.
Key Issues To Watch Out For
1. Legal Classification & Possession Rights
- ASTs: Allow landlords to regain possession via Section 21 (no-fault eviction).
- Non-Housing Act Tenancies: Require court proceedings to remove tenants — slower, costlier, and more complex.
Tip: Always confirm the tenancy type before signing.
2. Deposit Protection & Compliance
- Under AST rules, deposits must be protected in an approved scheme.
- If rent exceeds £100,000, this requirement no longer applies — but disputes can still arise.
- Tip: Even when not legally required, consider holding deposits in a secure, audited account to build trust with high-net-worth tenants.
3. HNW Tenant Risk Management
High-value tenants often have international income streams, offshore trusts, or corporate structures. Standard referencing may not suffice.
Tip: Conduct enhanced due diligence, including AML checks and proof of funds, or request rent upfront/corporate guarantees.
4. Tailored Tenancy Agreements
Generic AST templates rarely address the complexities of £100,000+ lets. Ensure your contract covers:
- Property use restrictions (subletting, events, staff accommodation).
- Repair obligations beyond statutory minimums.
- Break clauses aligned with relocation needs.
5. Tax & Structuring Considerations
Prime rentals often involve tax implications, from ATED (Annual Tax on Enveloped Dwellings) to inheritance tax planning.
Tip: Consult a property tax adviser to structure income effectively and remain compliant.
6. Dispute Resolution
High-value disputes can be costly and reputationally damaging.
Tip: Include strong mediation/arbitration clauses in the tenancy to avoid protracted litigation.
TOP TIPS FOR LANDLORDS OF £100,000+ RENTALS
- Confirm if your tenancy qualifies as AST or non-Housing Act.
- Use a solicitor experienced in prime London tenancies.
- Incorporate AML checks for HNW tenants.
- Review rent levels annually to avoid unintended legal changes.
- Build a clear exit strategy with bespoke break clauses.
Conclusion: Treat High-Value Tenancies as High-Value Assets
A £100,000+ tenancy is not just a standard let — it’s a sophisticated contractual relationship with significant stakes. Proper structuring and expert advice can protect your investment, ensure smooth tenancy management, and safeguard long-term returns.
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For more information about Domus Holmes Property Finder, please contact:
Jerome Lartaud: jerome@domusholmes.co.uk or follow Jerome on LinkedIn
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