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Right to Rent pilot project findings

Posted on 2015-11-09

The property industry had been waiting for the announcement detailing when the Right to Rent scheme would be rolled out on a national basis for some time. Last month, however, the waiting game was over.

On October 20 it was announced that Right to Rent, part of the Government's Immigration Bill, will become a national scheme on February 1 2016.

This means that all landlords, or letting agents working on their behalf, in England will now be required to check the immigration status of potential tenants to ensure they have the legal ‘right to rent' in the UK.

They will be able to do so by checking and taking copies of prospective tenants' identity documents.

Legitimate documents include UK passports, European Economic Area passport or identity cards, permanent residence cards or travel documents showing indefinite leave to remain.

Also accepted as proof of a right to rent are a Home Office immigration status document or a certificate of registration or naturalisation as a British citizen.

Those landlords or agents that don't carry out immigration checks could be hit with a penalty of up to £3,000 per tenant.

In December 2014, a pilot project was launched in the West Midlands areas of Birmingham, Dudley, Sandwell, Walsall and Wolverhampton.

The purpose of this project was to determine any potential issues with the scheme and to see how checking tenants' immigration status would affect the rental market before any national programme was introduced.

Alongside the Right to Rent start date announcement, the Government published some of the findings from the West Midlands pilot project, which make for interesting reading.

Key pilot project findings:

The Home Office's evaluation takes the pilot project's first six months (Dec 1 2014 – May 31 2015) into account.

A number of participating agents, housing association reps, landlords, tenants and local authority employees were surveyed to determine the scheme's impact on illegal migrants' access to housing, as well as impacts on the rental market, impacts on landlords who rent to illegal migrants and wider, more general impacts of the scheme on letting agents, landlords and tenants.

Significant figures:

  • The pilot project identified 109 individuals who were illegally in the UK, 63 of whom were previously unknown to the Home Office
  • The complex cases checking service was required to make 109 decisions during the pilot (94 'yes', 15 'no')
  • There were 13 referrals made for civil penalties and 5 civil penalties subsequently issued
  • Right to Rent referrals directly accounted for 37 enforcement visits
  • The Right to Rent helpline received 879 calls during pilot project
  • The online Right to Rent tool received 116,701 hits between September 2014 and May 2015

As well as surveys, part of the evaluation involved mystery shopping exercises. The Home Office reports that its mystery shopping trips showed no major differences in tenants' access to accommodation during the pilot project.

It did suggest, though, that a higher proportion of Black and Minority Ethnic tenants were asked to provide more information during rental enquiries.

What's more, the evaluation points out that a small number of landlords reported via mystery shopping exercises and focus groups that the scheme did indicate a potential for discrimination.

Another concern raised by some participating stakeholders was that the scheme could unintentionally make the prospect of renting difficult for some British citizens who don't have a passport of driving licence. One housing association that took part reported experiencing problems of this nature. This is also highlighted by the fact that according to the 2011 Census, around twelve million UK nationals do not have a passport.

Perhaps inevitably, the Right to Rent scheme also contributed to changes in the way some letting agents and landlords carried out the pre-tenancy process. Before the scheme was introduced, 53 of 64 letting agents and 18 of 35 landlords always required photo ID. After December 1st, this increased to 60 out of 64 letting agents and 26 of 32 landlords.

More than 75% of 56 letting agents surveyed said they felt the scheme had no obvious impact on the housing market, rental prices, turnover or availability of rental accommodation.

Landlords were more unsure on the scheme's impact with 46% of 114 saying rents had not changed as a result of the scheme but 45% of 114 saying they didn't know the impact of the scheme on rental prices. The evaluation says that results for turnover and property availability were very similar.

The evaluation sets out that on the whole landlords, agents and housing associations found Right to Rent checks undemanding but that some participants found that they took longer than anticipated.

Some 65% of 40 letting agents and housing associations found the checks 'easy', while the figure drops to 38% among the 26 landlords surveyed.

What's more, over 77% of 35 landlords surveyed said that the scheme had increased their workload, compared to 46% of letting agents and housing associations.

What can we learn from the pilot project?

The results of the pilot project show that perhaps Right to Rent has not caused quite the stir or the number of problems that many expected. It seems that the West Midlands rental market, in terms of tenant turnover and property availability, has been largely unaffected.

What the scheme in the West Midlands has shown us, though, is that landlords who carry out the checks themselves will experience an increased workload from February. What's more, many letting agents and landlords participating in the pilot project have had to change their pre-tenancy process by asking for photo identification.

From what we've seen so far, it seems that Right to Rent is largely an additional administration and organisational task, rather than one of 'border control' – a concern which has been raised by some parties.

In preparation for February's start date, landlords must make sure their administration processes are in order and that they will be able to incorporate Right to Rent checks into their existing tenancy process.

As we anticipate that many landlords will be asking their letting agents to carry out Right to Rent checks on their behalf, here at HomeLet we have been working on a solution to help agents cope with the increased responsibility and paperwork.

Our HomeLet Verify tool has been integrated into our existing systems which means letting agents using HomeLet will be complaint well in advance of the Right to Rent start date on February 1. Your letting agent can learn more about it here.

If you are concerned about the Right to Rent scheme and what you need to do, it could be wise to speak to an experienced letting agent or lettings professional.

Useful links for landlords:

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