A prominent property legal company has cautioned that landlords could be pushed to bankruptcy due to the substantial rise in fines proposed by the Home Office.
Landlords and agents found leasing their properties to undocumented migrants could be fined up to £5,000 for each tenant and £10,000 for every resident on an initial offence, a significant jump from the earlier £80 and £1,000 charges.
For subsequent offences, they might face fines of up to £10,000 for each tenant, a rise from £500, and up to £20,000 for every resident, increased from £3,000.
It’s anticipated that regulations to implement the fines will be rolled out in early 2024.
In reaction to the news, Gary Scott, a partner at the legal firm Spector Constant & Williams, remarks: “This update further tightens the noose around hobbyist landlords. It appears as if landlords are now expected to operate as an extension of the Border Force.
The surge in fines by a staggering 1000 per cent, reaching £10,000 per resident for an initial breach and escalating to £20,000 for subsequent violations (a 667 per cent rise), might deter numerous reputable landlords.
While the responsibilities remain the same, the repercussions of lapses have escalated from minor inconveniences to the risk of bankruptcy for numerous landlords.”
He adds, “In this context, an innocent oversight by a landlord, such as letting a family of four rent when their immigration visas have just lapsed, could potentially result in penalties totalling £40,000 for that landlord.”
“Many landlords, particularly those owning four properties or fewer – representing over half of all flats in the private rental market – lack the training and resources to act as Border Force officials. The government’s increasing demands on landlords have already pushed numerous out of the industry, and this latest step is set to drive even more away.”
It’s crucial to understand the pivotal role landlords hold within the housing sector. These increased challenges and fiscal threats not only jeopardise their means of income but might also ripple through the entire rental landscape. Should a significant number of landlords opt to leave due to these strict regulations, we may see a decline in rental property availability, pushing up prices for renters. The government faces a delicate task of balancing immigration rules with ensuring a consistent and reasonably priced housing market for all.
Read more Property Investing News HERE
