How will the Renters’ Rights Bill affect tenancies with very high rent?

The Renters’ Rights Bill is set to transform the legal framework for residential tenancies in England, introducing stronger protections for tenants and tighter regulations for landlords. But what about tenancies with very high rent, those commanding £100,000 or more per year? On the face of it, the answer is simple: they won’t be affected. But dig a little deeper, and the picture becomes more complex.

The current exemption: Schedule 1 of the Housing Act 1988

Residential tenancies with very high or very low rents are treated differently by the law.

Schedule 1 of the Housing Act 1988 lists various situations where a tenancy cannot be an assured or assured shorthold tenancy, and this includes tenancies with a rent above the high rent threshold. Currently, tenancies with annual rents above £100,000 are exempt from the statutory protections of the Housing Act 1988.

Instead, these tenancies are regarded as common law tenancies governed almost entirely by the terms of the contract and relevant common law requirements. The exemption exists because tenants in high-rent properties are presumed to be sophisticated consumers who do not need statutory protection. As these tenancies are exempt, they fall outside the scope of the reforms to assured tenancies in the Renters Rights Bill and are not affected by the proposed changes.

However, the Government has the power to increase the high rent threshold and can do so quite easily. If it chose to do so, the effect would be to bring tenancies with high rents into the reformed assured tenancy regime.

The 2010 amendment: Why was the threshold raised?

The last time the high rent threshold was amended was in 2010 when the annual rent threshold was increased from £25,000 to £100,000. This was done by way of a ‘statutory instrument’, The Assured Tenancies (Amendment)(England) Order 2010, and did not require a new Act of Parliament.

The reasons for the increase, as explained in the Explanatory Memorandum to the Amendment Order, included rising inflation and the changing market conditions. By 2010, many tenancies that would otherwise benefit from the statutory protections were excluded simply because their rent exceeded the outdated £25,000 threshold.

An increase in shared student housing and group tenancies meant that sometimes groups of ordinary tenants collectively entered into a tenancy which had a ‘high rent’. Increasing the annual threshold therefore, tied in with the policy objective to restore the original purpose to only exclude tenancies at the very top end of the market, not ordinary tenancies that had become expensive due to inflation.

The government at the time also considered whether the threshold should be reviewed regularly, every 1 – 5 years, or after longer periods of 5 – 10 years, or in line with inflation. A final period was not decided but the government decided to increase the threshold to £100,000 instead of a lower figure to avoid frequent future reviews.

Will the threshold be raised again?

Since 2010, rents, especially in London and high-demand areas, have continued to rise. Given the length of time that has elapsed, the shifting market conditions, the cost-of-living crisis, and increased inflation since the Covid-19 pandemic, there is a strong argument for reviewing and raising the threshold to better reflect current realities.

The retail price index (RPI) analysis in 2007 showed that between January 1989 (when assured tenancies came into existence) and September 2007, the value of money had halved; by August 2025, the RPI has doubled again. Therefore, a case could be made that the annual threshold should now be increased again, perhaps to £200,000, to reflect that inflation.

What happens if the threshold is raised to £200,000?

If the threshold were raised to say £200,000, very few tenancies would be affected. Most residential tenancies, even in prime London, fall well below this figure. But for those that do cross the line, the implications could be significant:

• These tenancies with annual rents of £100,000 – £200,000 would then fall within the scope of the Renters Rights Bill (or Act as it will be by then). Landlords would become subject to the rules, including restrictions on rent increases and the abolition of rent review clauses within the tenancies. The inability to rely on contractual rent review mechanisms could affect long-term profitability and investment planning.
• Further, landlords would need to follow statutory procedures for rent changes, tenancy renewals, and evictions. They will no longer be able to simply serve a Notice to Quit without first establishing a ground for possession. Tenants would enjoy greater protections and security of tenure.
• Landlords will also be required to ensure they comply with deposit protection rules, register themselves and their properties on the Private Rented Sector Database, and register with the Private Rented Sector Landlord Ombudsman otherwise they will become subject to penalties. This will also have an impact on their ability to recover possession of the properties.
• Landlords will continue to be subject to the repairing obligations under the contract but will become subject to the enhanced requirements to meet the property standards as under the Decent Homes Standards and Awaab’s Law.

Conclusion

At present, tenancies with very high rent will be exempt from the Renters’ Rights Bill because they will continue to be excluded from assured tenancy status. But this exemption is precarious: the government can raise the threshold by statutory instrument, as it did in 2010. Given inflation and rising rents, a new amendment may be due before too long.

If the threshold is raised to £200,000, the number of affected tenancies may be small, but the impact on landlords and tenants will be profound. Landlords will not only see their tenancies forced into the assured tenancy regime – they will see their tenants gain real security of tenure. While in 2010, security of tenure did not hugely impact the landlord’s ability to evict tenants, as they could serve section 21 notice and issue accelerated possession claims, if the threshold increases now, they will find it more difficult to evict tenants when section 21 notices have been abolished. This will likely be the biggest change that will affect landlords with high rent tenancies followed by compliance with the increased regulation.

The exclusion of certain tenancies through Schedule 1 of the Housing Act 1988 is a technical detail of housing, but for landlords who are affected they should factor this into their plans.