How does the Brexit Withdrawal Agreement affect buy-to-let landlords?

Does right to residency mean right to rent?

As I write this, the arguments and debates about the Withdrawal Agreement are rumbling on. These could derail the agreement in Parliament. Luckily for buy-to-let landlords, whether the Withdrawal Agreement is passed or not makes no difference to how the buy-to-let sector operates. Or does it?

The laws that regulate the private rented sector (PRS) in the UK are mostly unique to the UK. EU legislation has a very minimal effect on them. Therefore, it’s not surprising that there is not a single mention of the PRS or buy-to-let in the 585 pages of the Withdrawal Agreement (and I’ve looked hard for it).

However, buried within this modern day edition of War and Peace is the terms under which citizens’ rights will be protected. It is these that could affect buy-to-let landlords because it affects the Right to Rent legislation.

What does the Withdrawal Agreement say about EU nationals living in the UK?

If the Withdrawal Agreement is signed off by the EU and the UK, then its clauses which detail the right to reside in the UK will kick in. It is this that landlords may need to consider with regard to Right to Rent.

The Withdrawal Agreement specifically states that:

  • EU nationals who have lived legally in the UK for five years, and who have sufficient financial resources, have the right to permanent residence in the UK.
  • EU nationals who have not yet lived in the UK for five years can continue to live in the UK and obtain permanent residence after five years.
  • The rights to the residence will also apply to those EU nationals who arrive in the UK during the transition period.
  • Those EU nationals who meet any of the above criteria retain their rights to healthcare, pensions, and social security benefits to which they are currently entitled either from the UK or their original country.

All of these rights are reciprocated for UK citizens living in the EU.

How does this impact the right to rent?

Should the Withdrawal Agreement be signed, then these clauses confer the right to rent in the UK to EU citizens. So, for the time being, it is steady as she goes. Landlords must still abide by the Right to Rent rules, but in time, and after the end of the transition period, the situation with EU nationals is likely to become a little more complicated.

There are some potential innovations that are allowed under the Withdrawal Agreement that may help landlords to comply with the Right to Rent rules in the future. The UK government will be free to introduce residence permits for EU nationals or to build a digital database to do this. Should such a system be introduced, the Right to Rent checks should become easier to make.

So, Right to Rent is here to stay then…

Yes. Probably. Possibly.

The Right to Rent scheme could yet be scrapped, or completely revised. It is due for judicial review by the High Court in December, following an application for review made by the Joint Council for the Welfare of Immigrants (JCWI) in July 2018.

At the time, Chai Patel, the JCWI’s Legal Policy Director, told Sky News that, “The problem with this scheme isn’t that individual landlords are necessarily racist, it’s that the government has put in place a scheme that incentivises systemic discrimination against certain groups.

That contravenes the Human Rights Act and the European Convention on Human Rights, which prohibits that kind of discrimination and prohibits the government from putting in place schemes that encourage it.

In conclusion, the Withdrawal Agreement draws a line under the issue of Right to Rent for EU nationals and rewrites what could have been a grey area into black and white. However, the judicial review of Right to Rent may erase that line, or throw the whole issue up in the air to be rewritten again.

Watch this space for the developing story.

For effortless property management, contact Ezytrac today on +44 0 1522 503 717.

Live with passion,

Brett Alegre-Wood

By |2018-11-26T14:54:44+01:00December 10th, 2018|Landlord lessons, Property Management|0 Comments

About the Author:

Brett has over 20 years experience in all facets of property, he owns various companies centred around property and is the driving force behind the education and training at Ezytrac. His companies have sold over £850 million in UK and London property and he manages over 1200 properties through his estate agency chain. Today he shares his time between UK, Australia and Singapore. He is married to Arlene and together they have 4 kids. Brett holds both the Level 3 Property Mark Qualifications for Property Sales and Property Lettings and Management.