Right to Rent policy puts private landlords at risk

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1 Feb 2016

Private landlords are most at risk following ‘Right to Rent’ policy

Author: Michael Cook

Michael CookAs of 1st February 2016, the Right to Rent scheme came into play across the whole of England. Any landlords housing tenants that do not supply valid documents to satisfy the requirements of the Immigration Act 2014 now face up to £3,000 worth of fines per person.

Michael Cook (MARLA), Managing Director of Romans Lettings, comments:

Right to Rent has been introduced as part of the government’s reforms to build a fairer and more effective immigration system, and unfortunately, it’s the private landlords that are most at risk of facing the fines.

All private landlords or their agents - including those subletting or taking lodgers - now have to make the checks to see if their tenants have the right to be in UK before renting their property. The government has outlined what documents, or combination of documents, can be checked to prove a tenant has a right to rent in the UK, and these must be seen, with the tenant/s present, for all tenancies starting from 1st February 2016.

As an established lettings agency we already implement strict referencing criteria, and as soon as we were alerted of the Right to Rent scheme we employed an external company to train members of our lettings department in checking the documents required to prove each applicants’ right to rent in the UK and how to identify fraudulent documents. We also invested in Ultraviolet Scanners which aid us in this process. These initiatives come with a cost and the government cannot expect private landlords to pay out these expenses, and I believe it’s actually unfair to put this extra pressure on landlords, particularly given the important role they play in today’s UK housing market.

Of course it’s not just the Right to Rent scheme that landlords need to be aware of, other recent changes include the new Capital Gains Tax for non-UK residents, compulsory smoke and carbon monoxide alarms, Legionnaires’ disease risk assessments and changes to Section 21 notices as part of the Deregulation Act 2015.

And it doesn’t stop there, we’ll be seeing even more rules being enforced this year, such as the EPC legislation and wear and tear allowance, highlighting just how important it is for private landlords to stay on top of the law and feel confident that they understand their responsibilities when letting properties.

We’ve spoken to many local private landlords recently who are concerned about the latest legislation changes and what their responsibilities are to remain compliant. If you’re not a professional landlord and you don’t have the time to research and stay on top of all of these changes my advice would always be to appoint an established letting agent to look after your investments for you. Your agent should pick up the responsibility of these Right to Rent checks and the extra administrative burdens and be responsible for keeping you abreast of all other legislation changes that affect your investments, leaving you worry-free.

Despite the extra red tape, the buy-to-let market can still be an extremely lucrative investment and over 75% of people believe it is, in fact, the safest investment, according to a recent poll on romans.co.uk. We’re predicting both house price rises and rental increases of at least 5% in all of the areas that we cover this year as demand from buyers and tenants continues to grow, providing landlords with healthy capital growth and rental yields.

So, although it’s true that there is a lot more legislation to abide by, if you take the right advice and purchase the right sort of property in the right location you can still expect excellent returns in the short, medium, and particularly, long-term.

To find out more about any of the recent or forthcoming legislation changes and for expert property investment advice talk to the team at your local Romans’ branch, or register your interest in Romans’ investment services here: romans.co.uk/investors/choice-service.

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