The recent surge in residential rental values, specifically in London, has renewed the focus on a 2010 legislative amendment that provides that a tenancy cannot be an assured or Assured Shorthold Tenancy (AST) if the annual rent exceeds £100,000. All residential landlords should be aware of this threshold and the obligations and restrictions imposed on them as a result. Here, Paul Henson, senior associate at Collyer Bristow LLP, gives guidance on the most common form of letting arrangement in England.

UK rents will rise by 21% by 2018, according to property group Savills' five-year residential market forecasts, with rental values in London still higher, increasing by 25.8% over the same period. The data also indicates that rental values are outpacing underlying house price growth, which is expected to rise by 24.4% by 2018.

The UK private rented sector is growing quickly, and is expected to grow by a further one million households during the same five-year period as more residential investors enter the rental market. Quite an astonishing figure, when you consider that over a quarter (26%) of households in London already live in the private rented sector.