Can a Company Let Be an Assured Shorthold Tenancy?
Last updated: June 2025
This page provides legal information for general guidance only — it is not legal advice. Tenancy law is complex and has been changing rapidly in 2024–2025. Always confirm your specific position with a qualified solicitor before entering or varying any tenancy arrangement.
No. A company let cannot be an Assured Shorthold Tenancy. The two arrangements are mutually exclusive under UK property law, and understanding why matters practically — particularly for landlords considering serviced accommodation, management company arrangements or guaranteed rent schemes.
This page is for landlords who want to understand the legal distinction between an AST and a company let, what the practical differences mean for possession and mortgage compliance, and how management company arrangements — including short-let management — relate to these two frameworks.
It also covers the question of switching between a short-let arrangement and a long-term AST, which is one of the most common decisions landlords face when they are weighing up their options.
The answer to each of these questions has a direct bearing on how you structure your property arrangement — and in some cases, on whether your mortgage lender will permit what you are proposing to do.
No — a company let cannot be an Assured Shorthold Tenancy. Under the Housing Act 1988, an AST can only exist when the tenant is an individual who occupies the property as their only or principal home. A company is not an individual and cannot occupy a property as its principal home, so any tenancy where the named tenant is a corporate entity falls outside the AST framework entirely and is governed instead by contract law.
What makes something an AST — the conditions that must all be satisfied
An Assured Shorthold Tenancy is created under the Housing Act 1988. For a tenancy to be an AST, all of the following conditions must be met simultaneously. If any one of them fails, the arrangement is not an AST and different legal rules apply.
- 1 The tenant must be an individual — not a company, partnership, trust or any other corporate entity. This condition alone disqualifies any arrangement where the named tenant is a limited company or any other non-individual legal person.
- 2 The property must be the tenant's only or principal home — the tenant must be occupying it as their primary residence. A company cannot have a "principal home." Even where a company rents a property for an employee to live in, the company itself is not living there.
- 3 The annual rent must be under £100,000 — this threshold was raised from £25,000 in 2010. Properties with annual rents above this level are excluded from the AST framework regardless of who the tenant is.
- 4 The landlord must not be a specified exempt landlord — Crown tenancies, resident landlords in shared accommodation and certain social landlords create tenancies under different frameworks.
A holiday let fails condition 2 — the guest is not occupying the property as their principal home. A short-term Airbnb booking fails condition 2 for the same reason. A company let fails condition 1. In all three cases, the arrangement is not an AST, and the protections and obligations that apply to ASTs do not apply to either party.
What a company let is — and why it operates under a completely different legal framework
A company let is any tenancy or occupancy agreement where the named tenant is a company rather than an individual. This covers a wide range of common arrangements: a business renting a property to house an employee, a serviced accommodation operator taking on properties from landlords, a guaranteed rent company paying a fixed monthly amount in exchange for the right to sublet.
Because a company let falls outside the Housing Act 1988, it is governed entirely by general contract law. This has significant practical implications for both parties.
For the landlord
The company tenant has no statutory security of tenure. There is no requirement to serve a Section 21 "no-fault" notice, no Section 8 grounds requirement, and no court possession process equivalent to the AST possession proceedings. Possession is governed by whatever the contract specifies — which is why the notice period in a company let agreement is a negotiated commercial term rather than a statutory minimum.
This makes company lets structurally simpler to exit than ASTs, which is one reason why landlords who enter guaranteed rent or management company arrangements often find the exit process more straightforward than they expect. The company tenant cannot invoke statutory protections that simply do not apply to them.
For the company tenant
The company takes on full contractual responsibility for the property during the agreement. It cannot claim statutory protections against rent increases or possession proceedings, and it is bound by whatever terms the contract specifies regarding subletting, maintenance obligations and permitted use. The company's right to remain in the property is exactly as strong — and exactly as limited — as the contract says.
How the two arrangements compare — a practical summary for landlords
| Feature | Assured Shorthold Tenancy (AST) | Company Let |
|---|---|---|
| Who can be the tenant | Individuals only | Companies or other corporate entities |
| Governing law | Housing Act 1988 | Contract law (common law) |
| Security of tenure | Yes — statutory protections apply | No — contractual terms only |
| Notice to recover possession | S21 (no-fault) or S8 (fault-based) — statutory process | Whatever the contract specifies |
| Deposit rules | Tenancy Deposit Scheme required by law | No statutory TDS requirement — contractual arrangement |
| Rent increases | Governed by statutory rules (Section 13 or agreed rent review) | As specified in the contract |
| Right to sublet | Requires landlord's consent unless lease expressly permits | As specified in the contract — often permitted and is the purpose of the arrangement |
| Mortgage implications | Standard BTL mortgage usually permits individual AST tenants | Many BTL mortgages require specific lender consent for company lets |
How serviced accommodation and management company arrangements fit into this framework
When a landlord uses a short-let management company or a guaranteed rent provider, the legal structure of the arrangement matters — and it is almost always a company let or a licence, not an AST.
The guaranteed rent model
Under a guaranteed rent arrangement, the management company (acting as a corporate entity) agrees to pay the landlord a fixed monthly sum in exchange for the right to manage and sublet the property. The company then lets the property to short-term occupants — typically as a serviced apartment or holiday let. Those end occupants are not AST tenants of the landlord. They are either licensees of the management company or guests under a short-term letting agreement. The management company's arrangement with the landlord is a company let — not an AST — and the landlord's ability to recover possession is governed by the contract with the management company, not by Housing Act possession proceedings.
The management-only model
When a management company manages a property on behalf of the landlord without taking on the tenancy itself, the legal relationship is different again. The landlord remains the legal landlord. Guests are licensees of the landlord (through the management company as agent). There is no tenancy at all — the short-term booking agreements used by platforms like Airbnb create licences, not tenancies. This is a significant practical point: a guest who has booked an Airbnb stay has no tenancy rights and cannot claim to be a tenant under the Housing Act.
Switching between a short-let arrangement and a long-term AST — what you need to know
Landlords considering a switch from long-term letting to Airbnb, or from Airbnb back to a long-term AST, face different legal and practical challenges depending on which direction they are moving.
Switching from AST to Airbnb (long-let to short-let)
If your property is currently let on an AST, you cannot simply decide to switch to short-let use while the tenancy is running. Your AST tenant has statutory security of tenure and the right to remain in the property until you recover possession through the proper legal process — either by serving a valid Section 21 notice (where this is still available to you), serving a Section 8 notice with valid grounds, or waiting for the tenancy to expire and the tenant to vacate voluntarily.
Once the property is vacant — after the tenancy has ended and the tenant has left — you are free to use the property for short-term letting, subject to your mortgage lender's consent and any applicable planning or licensing requirements in your local authority area.
You cannot serve notice on an AST tenant for the sole purpose of converting to Airbnb use, as this may not constitute a valid Section 8 ground and a Section 21 notice, where still available, does not require a stated reason. The Renters' Rights Bill, progressing through Parliament at the time of writing, proposes to abolish Section 21 entirely — which would change the notice process significantly. Confirm the current law with a solicitor before acting.
Switching from Airbnb back to a long-term AST
This is simpler in structural terms. If the property is currently managed as a short let with no long-term occupancy agreements in place, you can choose to market it for a long-term tenancy and enter into an AST with a new individual tenant. There is no legal barrier to switching — the practical considerations are ensuring your mortgage permits AST use (if it was previously on a holiday let or SA mortgage), giving adequate notice to any management company if one is in place, and ensuring no active short-term bookings are accepted beyond the date you intend to begin the long-term tenancy.
If you have an active management company arrangement, review the notice period in your agreement — typically two to three months — and serve notice in accordance with the contract terms before accepting new AST tenants.
Questions landlords ask about company lets and assured shorthold tenancies
No. An Assured Shorthold Tenancy can only be held by an individual who occupies the property as their only or principal home. A company cannot satisfy either of those conditions. If a company rents your property — whether for employee accommodation, as a serviced apartment operator or under a guaranteed rent scheme — the arrangement is a company let governed by contract law, not a Housing Act tenancy. The company has no statutory security of tenure, and possession is governed by whatever your contract with the company specifies.
The most significant practical difference is possession. Under an AST, recovering possession from an individual tenant who refuses to leave requires following the Housing Act possession process — serving valid notice (Section 21 or Section 8), waiting for the notice period to expire, and potentially going to court. Under a company let, possession is governed by your contract with the company. If the company is in breach or the notice period has expired, you can recover possession through the contract's enforcement mechanisms rather than the Housing Act possession route. This makes exit from a well-drafted company let agreement typically more straightforward than exit from an AST.
The other significant difference is mortgage compliance. Many buy-to-let mortgages permit AST tenants but require specific consent for company lets. Check with your lender before entering a company let arrangement.
Yes — provided you have no active management company arrangement with an unexpired notice period. If you are managing the property yourself via Airbnb, you can simply stop accepting new bookings after any committed ones are completed, and then market the property for a long-term tenancy. If you use a management company, review the notice terms in your agreement and serve notice in accordance with them before marketing to long-term tenants. You should also confirm with your mortgage lender that the switch from a holiday let or short-let mortgage product to a standard buy-to-let AST arrangement is permitted under your current terms — or whether a product switch is required.
It depends on your specific mortgage product and lender. Many standard buy-to-let mortgages are approved for AST tenancies only, and permit company lets either with specific consent or not at all. Some lenders require you to notify them and obtain permission before entering a company let — others prohibit them entirely on certain products. If your property is managed by a serviced accommodation company, a guaranteed rent provider, or a short-let operator, check your mortgage terms before entering any agreement. Proceeding without lender consent where it is required constitutes a breach of your mortgage conditions and could have serious consequences. If in doubt, speak to your mortgage broker.
It depends on the arrangement. There are two common models. Under a management-only arrangement, the management company acts as your agent — you remain the landlord, the company manages on your behalf, and guest bookings are licences between you (via the agent) and the guests. There is no tenancy between you and the management company in this model. Under a guaranteed rent or lease arrangement, the management company takes on the property as a corporate tenant — paying you a fixed rent and subletting to guests as its own operation. This second model is a company let. The documentation you sign should make the structure clear. If it does not, ask for clarification before signing.
You are not legally required to use a solicitor, but using one is strongly advisable for a company let that involves significant income or a subletting arrangement. A company let agreement has no Housing Act framework to fall back on — every term that matters (notice period, permitted use, subletting rights, maintenance obligations, reinstatement at end of term, handling of deposits) must be clearly written into the contract. A poorly drafted company let agreement can leave you in a weaker position than a standard AST would have. A solicitor specialising in landlord and tenant work can draft or review the agreement and flag any terms that do not adequately protect your position as landlord.
Wondering whether short-term letting or a long-term tenancy would pay more for your property?
The income estimate compares what your property could earn on short-term letting against the long-let alternative — specific to your postcode, including slower months. Takes 2 minutes.