Right To Rent in London – property landlords could be fined £3,867,000 per year · 19/01/2024
“Who would want to move to London in weather like this?” was what one buy-to-let landlord said to me as we shook hands outside his property in Chelsea the other afternoon.
It was windy, cold, it had been raining most of the day and it was the last appointment of the day at 4.45pm. As a leading letting agent in London, I was happy to see the day’s end.
As I’d been out of the office all day I must admit that I was looking forward to getting home, putting the fire on, and watching TV with a cup of coffee – but this particular property landlord lived in neighbouring Manchester, and this timeslot was the earliest he could do that day.
It turned out he had been self-managing the rented property in London himself over the last few years, but was worried about the new legislation that had been introduced recently.
He was particularly concerned about the up-and-coming ‘Right to Rent’ legislation, so as his tenant had handed in their Notice recently, he called us for our opinion on the new Tenancy Agreement for the incoming professional tenant in Chelsea.
For any property investors in London that don’t know, property landlords will need to check the immigration status of any new tenants moving into their rented properties from February 2024 – or face a £3,000 fine.
It is called the ‘Right to Rent’ rules. However, tenants should also be aware that as well as traditional landlords, tenants who sub-let rooms and homeowners who take in lodgers, must also check the right of prospective tenants to reside in the UK.
Our buy-to-let landlord from Manchester wanted to know how much of a real issue was ‘Right to Rent’ in London. Our multiple award-winning letting agents advise clients on these issues.
I was able to tell him, the last available figures (from a couple of years ago) show that 1,289 people (whom were registered as Non-UK Born Short-term Residents) moved into private rented accommodation in the London City Council area in one year alone.
If all of those people weren’t supposed to be in the UK, that would be a fine of £3,867,000 to the private rented property landlords in all BS postcodes.
It doesn’t sound a lot when you think there are 535,907 residents in London City Council area, and of those, 467,609 people (or 87.26%) were born in the UK.
But London is a cosmopolitan city, as the country of birth of the residents in the London City Council area can be split down as follows:
UK 87.26%
Ireland 0.61%
Europe 4.34%
Africa 2.55%
Middle East and Asia 3.40%
Americas and Caribbean 1.45%
Australia and Pacific region 0.32%
However, it must also be recognised that property landlords in London, by checking up on their new tenants, could potentially be accused of discrimination under the Equality Act.
This is a real minefield for buy-to-let landlords, especially when you consider that not all of the 23,279 Europeans in the area necessarily have the right to live in the UK either.
All property landlords in London will need to check and retain copies of certain documents that show a potential tenant has the right to live in the UK. These include:
UK Passport
EEA Passport/Identity card
Travel document or Permanent Residence Card showing indefinite leave to remain
Paperwork from Home Office stating their Immigration status
Certificate of registration or naturalisation as a British citizen.
I hope the new law will target any dishonest property landlords in London who repeatedly fail to carry out Right to Rent checks, by making it a criminal offence.
This means they could face imprisonment for failing to check on their tenants. That is why more and more buy-to-let landlords in London are asking letting agents to manage their properties, so they can stay the right side of the Law.
So what did our property investment landlord in Chelsea do, you ask?
After our chat, he asked us to find a tenant and manage the property for him – he had been reading the London Property Blog for a while and because of the knowledge we impart to property landlords, we know what we are talking about as letting agencies in London.
Even though this cost him agency fees, I was able to get him an additional £125 per month for his property when we found him a tenant for his Chelsea rented property within one week later. Our property management services in London deliver added value in this way.
Together with the peace of mind we will keep him the right side of the law and put a stop to midnight phone calls complaining about dripping taps. It’s a win-win situation for all.
To keep up-to-date with the rented property sector in London, visit my property blog here.