According to the government’s impact assessment, the cost of familiarising buy-to-let landlords and letting agents with the new rules could cost as much as £54.8m.

Over the next ten years, buy-to-let landlords are also expected to spend up to £80.5m checking their tenants’ immigration statuses. Given that letting agents are likely to pass on their costs to landlords and tenants, landlords are expected to face as much as £52.9m in fees.

In the government’s most pessimistic analysis, the scheme could cost £256.5m to landlords and the Home Office over ten years. Even when weighed against the total benefits, the cost was £137m.

The report, which attempted to quantify the impact of the policy, said housing was a “key enabler” of illegal immigration:

“The direct costs and benefits are those that are clearly and immediately related to landlords checking the residency status of their tenants.

“The direct benefits, on the other hand, include income for the HM Treasury consolidated fund from civil penalties issued to non-compliant landlords.”

The Home Office anticipates it will issue 270 penalties against individual landlords per year, as well as 110 against business landlords and 280 against letting agents. It expects more than half of landlords of all types will raise objections to the penalties.

Landlord and tenant referencing service Certifi founder Gordon Covell said:

“The landlords I have spoken to say the same thing – how can a government who can’t police our borders make us responsible for overseas tenants?”

He said landlords were likely to pass the costs on to tenants: “Somebody has to pay somewhere along the line, and it’s mainly the people at the bottom of the food chain.”

Critics have dismissed the scheme as ‘unworkable’.