Residential: Immigration Act impact
Is this the right answer?
8 April 2015
Andrew Bulmer considers the impact of the Immigration Act 2014 on property professionals
The Immigration Act 2014 contains 77 clauses and makes fundamental changes to how the UK immigration system functions. According to the UK government website, the aim is to limit the factors that draw illegal immigrants to the UK and make it easier to remove those with no right to be in the country. Immigration and Security Minister James Brokenshire describes the 2014 Act as 'a landmark piece of legislation that will build on our existing reforms to ensure that our immigration system works in the national interest'.
The government website summarises the 2014 Act’s aims as:
- cutting the number of immigration decisions that can be appealed from 17 to 4
- ensuring the courts have regard to Parliament’s view of what the public interest requires when considering the European Convention of Human Rights Article 8 claims in immigration cases, making clear the right to a family life is not to be regarded as absolute and unqualified
- clamping down on people who try to gain an immigration advantage by entering into a sham marriage or civil partnership
- requiring private landlords to check the immigration status of tenants, preventing those with no right to live in the UK from accessing private rented housing.
Under the new law, private landlords will need to see evidence of a person’s identity and citizenship (e.g. a passport or biometric residence permit). Failure to do so could result in a fine of up to £3,000. The government argues that many landlords already do this and most legal renters will have the correct documentation readily available.
It is hoped that in most cases landlords will be able to carry out checks without needing to contact the Home Office. Copies of the documentation must be taken as evidence that the checks have been carried out and retained for one year after the tenancy ends.
West Midlands pilot
The government has rightly been proceeding cautiously with this new law, with a phased introduction in five council areas of the West Midlands – Birmingham, Walsall, Sandwell, Dudley, Wolverhampton – that started on 1 December 2014. This phase is set to last 6 months and will be carefully evaluated. It should be after the general election before Parliament votes on whether to roll it out nationally.
The West Midlands pilot scheme will also come under close scrutiny from a steering panel, which includes the British Property Federation and RICS. It is jointly steered by Brokenshire and an independent member of the House of Lords, Lord Best. The group, which has been meeting monthly, has worked constructively to ensure this first phase is well promoted, conducted correctly and evaluated thoroughly. Its aim is to ensure that Parliament’s decision is well informed and learns the lessons from this first phase.
Views from the profession
The stated aim of the legislation is to stop rogue landlords letting substandard property to low-paid immigrants. It is estimated that up to 85% of illegal immigrants end up living in privately rented accommodation.
However, several lettings organisations have expressed concerns over legal changes that will oblige agents and landlords to police the immigration status of tenants. Stephen Perry, Commercial Director of Landlord Assist (a lettings organisation that specialises in tenant eviction and tenant referencing across the UK) says:
'This legislation will create extra red tape for agents and landlords. It is not viable for them to carry out this additional responsibility without proper education and training. To be able to decipher Home Office documents or visa documentation is probably a bridge too far.'
Fran Mulhall, Operations and Lettings Manager of Newcastle upon Tyne-based GFW Letting says:
'Neither an agent nor a landlord is a skilled border control officer. It is likely that the only immigration document they are familiar with is a British passport, which many Britons do not have. This creates an added difficulty and will almost certainly result in acts of discrimination where the landlord or agent chooses to be safe rather than risk financial penalties.'
There are more than 1.4 million private landlords in the UK, she adds, and it is unlikely that Home Office employees can deal with the checks as quickly as required by landlords, a point made by RICS in its submission to government in May 2013.
RICS has questioned the rationale behind the measure and campaigned vigorously on behalf of its members
There are also concerns that landlords who do not use an agent to let their properties could be targeted by individuals who do not have the necessary documentation. Documents will need to be rechecked when an existing tenant signs a further agreement, which may include scrutinising temporary visas that may not be extended. Landlords and agents will have to be vigilant in the case of older children (although the act does not apply to those under 18, their ages will need to be confirmed) or any other additions to the household.
Ian Fletcher, Director of Policy (Real Estate) at BPF says:
'Landlords are not enamoured about conducting such checks on new tenants’ immigration status. We will all have individual views on the pros and cons of immigration, and whether landlords’ checks on their tenants are necessary or desirable.
'We engaged with government during the Immigration Bill’s passage and were pleased that we were able to secure changes to what had originally been planned. The act comprises a phased, rather than a ‘big-bang’ approach; it also includes exemptions for students living in private purpose-built halls and university-let accommodation, as they already face other immigration checks.'
View from RICS
Tim Wainwright, RICS UK Parliamentary Affairs Manager, comments:
'RICS has questioned the rationale behind this measure and campaigned vigorously on behalf of its members. It has clearly outlined its position to government.
'RICS recognises and understands government’s policy objective to reduce the number of illegal immigrants entering and living in the UK, given the associated economic and social problems. However, it has serious concerns about government’s proposed use of private landlords and lettings agents to help deliver this objective. Its response to the Immigration Bill and the proposals contained within, which aim to tackle illegal immigration in privately rented accommodation, is informed by comments received from RICS members.'
These concerns were included in RICS’ comments to the Queen’s Speech in May 2013, which were broken down into three main themes. The submission stated that:
- RICS considers it inappropriate to use private landlords and lettings agents to help deliver government’s immigration policy without first introducing clear regulations to ensure that individuals and businesses were fit to take on such responsibilities. RICS has called for regulation of lettings agents for a long time, and welcomes government’s amendment to introduce statutory redress arrangements for all lettings and managing agents.
- RICS considered the policy proposals would introduce significant additional administrative burdens on private landlords and lettings agents; these are the sectors government proposed using to help deliver its immigration control policies. It was concerned about the ability of the Home Office to advise landlords and lettings agents, both of whom were likely to have many questions, and that the costs of administrative delays would be borne by business, not government.
- RICS was concerned about potential unintended consequences, for example:
- some landlords and lettings agents could pass on the additional administrative costs incurred by undertaking immigration controls to tenants in the form of increased rents
- some landlords could decide the increased red tape and/or potential for civil penalties make it unattractive to let their properties and exit the market thereby reducing housing supply in the private rented sector, at a time when UK housing supply is already constrained
- some private landlords and lettings agents may decide to target prospective tenants from those elements of the UK population they perceive to be easier to administer rather than those that would involve the proposed immigration checking scheme; this could have a detrimental impact on those members of black and ethnic minority groups with legal rights to reside in the UK and the outline impact assessment needs to be amended to reflect this.
- Related competencies include Leasing, letting
- This feature is taken from the RICS Property journal (March/April 2015)
RICS continues to urge government to reconsider its approach. It does not believe that ploughing additional public sector resources to empower and enforce landlords and lettings agents to undertake immigration checks on people already in the UK is the best way to reduce illegal immigration. If government does decide to persist with this policy approach, RICS would expect to see clear and accessible help and support for all landlords and lettings agents on their responsibilities, proportionate and targeted enforcement. It would also expect to see a formal review of the new arrangements after 12 months to assess if this policy approach is achieving its staged objectives.
Andrew Bulmer FRICS is RICS UK Residential Director