Landlords: will the new UK immigration laws affect you or your tenants?

 

From 1 January 2021, UK immigration will be controlled under a points-based system, and it could affect landlords and their tenants.

The new policy, announced by Home Secretary Priti Patel, will mean anyone wishing to move to the UK will need to score a minimum of 70 points under new criteria. The rules will take effect from the beginning of next year, and will apply to EU and non-EU citizens equally.

Applicants will be assessed on a number of factors including salary, English-speaking ability, education level and whether the person’s job or job offer is “in a shortage occupation”. Some of the criteria will be essential, while some will be tradable with other areas in order to make up the minimum amount of points.

The new system will run alongside the existing EU Settlement Scheme (EUSS), which grants permission to qualifying EU citizens to stay in the UK after 30 June 2021 under settled or pre-settled status.

Buy-to-let landlords must check tenants

There are already laws in place – under “Right to Rent” regulations – which mean that all landlords or letting agents where applicable must check their tenants’ right to rent property in the UK. This involves checking passports and any relevant original documentation prior to a tenant moving in.

When the points-based system comes in, the same rules are expected to apply, meaning the onus is on the landlord or letting agent to ensure their tenants are eligible to reside in the UK. At present, failure to do so can lead to an unlimited fine or even a prison sentence.

Currently, despite the EUSS being in operation, it is illegal to ask EU, EEA or Swiss citizens to show that they have settled status or pre-settled status when starting a new tenancy. It will also not be necessary to make retrospective checks for existing tenants from 2021, although there is no current guidance for what landlords will need to do after this date for new tenants.

However, the Royal Landlords Association (RLA) is now urging landlords to have a conversation with their tenants about the EUSS rules, to ensure they are aware of what they might need to do.

What landlords need to do

Discrimination against tenants based on race is illegal, and it is important for landlords to be aware that whether or not they believe the tenant is from overseas, the same eligibility checks still apply. The Right to Rent scheme has come under extensive criticism for promoting discrimination based on nationality, as landlords have perceived that avoiding letting to non-UK citizens will reduce their risk of getting it wrong.

If you operate through a letting agent or managing agent, you should find out if these checks are carried out by them as part of their service. If you self-manage, it is vital to keep up to date with any immigration changes as they happen that could affect you or your tenants, and get professional advice where necessary.

If you’re a landlord for student accommodation, the current advice is that students will be assessed under the same points-based immigration system, but under slightly different characteristics. They will need to prove they have an offer from an approved university or college, can speak English and are able to support themselves during their studies in the UK.

Effects on the housing market

The new immigration system has caused some concern over how it will affect the housing market, due to its impact on the construction industry. Figures show that construction currently relies on foreign migrants for 10% of its workforce – 8% from the EU and 2% from the rest of the world.

According to the BBC, many construction firms fear that there are simply not enough spare UK workers to fill the gap these new measures will create. However, the initiative has been “cautiously welcomed” by the Construction Industry Training Board (CITB), which has commended the government’s commitment to “lowering the salary threshold for skilled migrants, increasing the number of construction occupations eligible to work in the UK, and the commitment to monitor and respond to skills shortages”.

CITB strategy and policy director Steve Radley said: “These policies are essential in light of the government’s expanded public investment programme and big ambitions for new homes.”

“However, we need to see how this will work in practice, and to agree how we can minimise the impact of restrictions on low-skilled workers. We will also work with government to ensure self-employed people can continue to work in the UK construction industry through a new route that doesn’t require employer sponsorship.”

“We also note the government’s commitment to investing in home grown talent and look forward to discussing how the apprenticeship system and Further Education can deliver better outcomes for industry.”

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Landlords: will the new UK immigration laws affect you or your tenants?

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