What next for Right to Rent?

Published 21 March 2019

On 1st March, the High Court ruled that the Right to Rent Scheme is incompatible with the Human Rights Act 1998 and declared that any proposal to extend the scheme from England to the rest of the UK (albeit no date has been put in place for the proposed roll out) would be irrational and a breach of the Equality Act 2010.

The Scheme

The Right to Rent Scheme (the “Scheme”) was introduced in February 2016 as part of the ‘hostile environment’ policy aimed at tackling and discouraging illegal residence, thereby easing pressure on the housing market and public services, and to enable rogue landlords who deliberately exploit the situation of illegal immigrants to be penalised or prevented from doing so.

The landlord must (to ensure he avoids a civil penalty of up to £3,000 per tenant) either request, obtain, check and copy the relevant identity documents before renting the property, or instruct an agent responsible for doing those things. Sometimes, a single document will suffice such as a passport, a document giving indefinite leave to remain or a biometric residence permit. However, for prospective tenants who do not have one of those documents, there is a longer list of alternative documents, any two of which can be provided in combination. Landlords who authorise disqualified persons from abroad to rent or occupy accommodation, knowing or having reasonable cause to believe that they are disqualified, are liable to be fined and/or imprisoned unless they can demonstrate that they undertook the prescribed checks and, where necessary, informed the Home Office of the disqualified person's occupation of the premises. Where a landlord is made aware that an occupier does not have the right to rent, the landlord is required to take reasonable steps to letting which may include steps to repossess the property. The total value of fines collected by the Home Office under the Scheme up to March 2018 was £265,000.

Following a challenge from the Joint Council for the Welfare of Immigrants, the High Court ruled that the Scheme not only provided the opportunity for private landlords to discriminate (for which the Government argued it could not be liable) but causes them to do so where otherwise they would not. The sanctions and penalties imposed by the Scheme meant that landlords had reacted in what the High Court considered to be a logical and wholly predictable way i.e. by choosing to rent to those who could or appeared to be able to evidence their right to rent most simply (for example because they were a British citizen). This meant, either deliberately or by unconscious bias, that a landlord was less likely to rent a property to an applicant from overseas. The High Court found that the safeguards used by the Government to avoid discrimination, namely online guidance, telephone advice and codes of conduct and practice, have proved ineffective. In reaching its decision, the High Court relied upon the extensive evidence presented by the claimants and interveners to show discriminatory effect – which included mystery shopper evidence. In contrast, the Home Office had failed to test for nationality discrimination at all in the pilot and was carrying out zero monitoring of the scheme to support an argument that there was not a discriminatory effect.

What Next for Landlords?

Unless and until Government legislates to withdraw the Scheme, Landlords and Agents operating in England should be aware that for now, the Scheme remains in force. There will be no immediate change to the operation of the policy, and those letting property will still be obliged to conduct Right to Rent checks in the usual way.
In a written statement issued on 5 March, The Minister of State for Immigration, Caroline Nokes MP, confirmed that the Government disagrees with the decision of the High Court, and has been granted permission to appeal ‘all aspects of the judgement.’ It looks likely therefore that further litigation will follow, albeit what appetite the Home Office will have for issuing fines for non-compliance in the meantime is questionable.