Fran Mulhall, Operations and Lettings Manager of GFWLetting, urban property rental specialists based in Newcastle upon Tyne, discusses the implications The Immigration Act 2014 will have on UK landlords.
“The UK private rental market continues to grow at a pace as we approach 2015. With at least five tenants chasing one property at any one time, it’s no surprise that private landlords now manage almost a fifth of homes in the UK.
With the rate the market is continuing to grow at, it’s obvious that the need for increased regulation has become greater for all parties involved – landlords, tenants and letting agencies. Indeed, it’s clear that legal measures need to be in place to both promote and protect these parties in a fair and just way and to stamp out unscrupulous traders.
The latest legislation, to be piloted from 1st December, is a requirement for landlords to conduct checks to ensure that new tenants have the right to rent in the UK under The Immigration Act 2014. It means landlords will have to vet each tenant to see if they have a right to live in the UK and thus a right to live in the property. If a landlord does not carry out the appropriate checks and the tenant is in breach of the Act, they will face a hefty fine of up to £3,000.
The aim is to drive out the rogue landlords – and agents – who deal with illegal residents which I, of course, welcome as these traders do affect the market but I worry about the implications of this legislation and how it’ll affect the health of the lettings industry.
A key issue to consider is how the immigration check will be managed effectively. Where will the liability lie if things go wrong and legislation is not followed correctly despite a landlord’s best intentions? The majority of landlords will probably lean on lettings agents for guidance and ask them to complete the check on their behalf. How will this actually be done though? Will it be incorporated into the reference check? Ultimately, even if an agent carries out an immigration check on a landlord’s behalf, the responsibility lies with the landlord.
As a manager of a lettings agency, I think the immigration check is going to prove too much of a minefield for landlords and agents alike. If a tenant has a UK passport then it is pretty straight forward, however, if they don’t but have other documentation that is equally as legal, this is where the confusion begins. Landlords, nor agents, are immigration officials and it is likely that the only immigration document that they’re familiar with is a British passport. Many British people, however, do not have a passport and for those tenants who don’t this will create an added difficulty for landlords and almost certainly result in acts of discrimination where the landlord, or agent, chooses to be safe rather than sorry and be penalised financially. It is easy to see, therefore, how many legitimate tenants, including foreign nationals and ethnic minorities too, could be discriminated against if their residency status is unclear.
You also have to think about the added burden the additional checks will have on Home Office staff. The main concern for landlords are periods of rental void so it will be crucial that checks are completed as quickly as possible. With 1.4 million private landlords in the UK, it is unlikely that Home Office employees are going to be able to deal with the checks as quickly as landlords require them – mounting more pressure on landlords as empty properties means empty pockets.
Given its complexity, it is likely that landlords will end up paying agencies or other parties to help guide them through immigration checks correctly. This is money they will have to recoup which will mean that they’re going to have to increase their rental fees – pushing up rent costs further. A worrying thought when recent statistics show that rental prices across Britain as a whole are continuing to rise year on year.
While I wholeheartedly agree that the lettings market requires tighter, better regulation I don’t see how the immigration checks will have a positive impact on the marketplace. Indeed, it could lead to legal immigrants and vulnerable groups of society to be forced to use unscrupulous landlords or agents if they are not verified correctly – thus having the opposite effect of what we want to achieve.
It will also add extra pressure on landlords who are already feeling the strain. A recent Residential Landlords Association (RLA) survey found that 82 per cent oppose the Bill, believing it will damage good landlord and tenant relationships. I do agree that we need to work together to clamp down on those who live and work in the UK illegally but I do not think this is the way to do it. Rather, this process will only serve to hinder the industry and put both landlords and tenants at risk.”
For more information about the points raised in this discussion, please visit: www.gfwletting.co.uk or call 0191 284 7171.