Brexit

RLA warns that the rental market is unprepared for Brexit

New data released by the Residential Landlords Association has revealed that Ministers have failed to publish any guidance for landlords about how the Right to Rent scheme will operate after Brexit.

The latest analysis of UK house prices from Halifax have shown that, during Q1, prices were 2.6% higher than in the same three months of 2018. 

When measured quarterly, prices saw a 1.6% rise in Q1 compared to Q4 2018. House prices fell by 1.6% on a monthly basis, rebalancing the 5.9% rise seen in February. 

Russell Galley, managing director at Halifax, said: “The average UK house price is now £233,181 following a 1.6% monthly fall in March. This reduction partly corrects the significant growth seen last month and again demonstrates the risk in focusing too heavily on short-term, volatile measures. Industry-wide figures show that the number of mortgages being approved remains around 40% below pre-financial crisis levels, and we know that lower levels of activity can lead to bigger price movements. 

The more stable measure of annual house price growth rose slightly to 2.6% and is still within our expectation for the year. The need to build up a deposit before getting a mortgage is still a challenge for many looking to buy a property. However, the combined effect of fewer houses for sale and fewer people looking to buy continues to support prices in the long-term.

As a result of this government failure, many landlords are voicing concerns that EU citizens may face problems getting rented accommodation once we leave the EU. 

Under the Right to Rent scheme, landlords are responsible for checking the immigration status of their tenants with the prospect of prosecution if they know or have “reasonable cause to believe” that the property they are letting is occupied by someone who does not have a right to rent in the UK. 

With two thirds of all EU nationals in the country living in private rented housing, the Residential Landlords Association is worried that landlords have received no specific guidance about their status, other than sweeping statements by Ministers. 

Last month, a High Court Judge ruled that the right to rent scheme breached the European Convention on Human Rights on the basis that it led to inadvertent discrimination against non-UK nationals with the right to rent. 

The RLA’s most recent research suggests that around a fifth of landlords are less likely to rent to nationals from the EU or the European Economic Area as a result of the Right to Rent, a figure the RLA warns could increase post-Brexit. 

David Smith, Policy Director for the Residential Landlords Association, said: “Landlords are not border police and cannot be expected to know who does and who does not have the right to live here. 

The Government needs to publish clear and practical guidance for landlords about the implications of Brexit on who they can and cannot rent to. If they do not, more landlords will become increasingly fearful about renting to non-UK nationals with the potential of facing prosecution. The result will be they will avoid renting to anyone who is not a UK national making life difficult for EU nationals.”