Leaseholders Liberated: The Fall of the AST Trap

The long criticised Assured Shorthold Tenancy (AST) trap - a legislative flaw that placed certain long leaseholders at unexpected risk - has been decisively removed through the Renters’ Rights Act 2025. This reform marks a major shift in the property landscape, eliminating a technical anomaly that for years caused uncertainty in the leasehold sector.

The AST trap arose from an unintended consequence of the Housing Act 1988, which meant that long leases with ground rents exceeding £1,000 per annum in London (£250 outside of London) could be treated as assured shorthold tenancies. In practice, this classification allowed landlords to seek possession under Ground 8 of the Housing Act, a mandatory route that required courts to grant possession if more than three months’ ground rent was unpaid. Owners of flats with long leases could therefore face eviction through a mechanism designed for short term letting arrangements. 

As modern developments began introducing higher and often escalating ground rents, increasing numbers of long leases inadvertently fell within AST criteria. This created alarm among mortgage lenders in particular, who risked losing their security if a landlord successfully obtained possession without any obligation to notify them. Legal practitioners also faced delays and complications, often resorting to deeds of variation or indemnity insurance policies to protect lenders and progress transactions.

The Renters’ Rights Act 2025, which received Royal Assent on 27 October 2025, has now brought this issue to an end. From 27 December 2025, long leases are expressly excluded from being defined as assured tenancies. As they can no longer be classified as ASTs, leaseholders are protected from Ground 8 possession proceedings linked to ground rent arrears. 

Final thoughts

The closure of this loophole carries far reaching practical benefits. It removes the need for potentially costly legal workarounds, stops this issue from slowing down conveyancing transactions, and restores confidence for mortgage lenders. For leaseholders, it eliminates an outdated technical risk that undermined security of tenure. With this correction, the system now aligns more closely with the intended protections for long term residential ownership, marking a long-awaited modernisation in housing legislation.

Nothing in this note constitutes legal advice to any person.