Right to Rent laws will undergo scrutiny after campaigners won the first round of a legal challenge.
The High Court has granted permission for the Joint Council for the Welfare of Immigrants (JCWI) to take their case to judicial review.
Under Right to Rent, landlords must check the immigration status of their tenants to ensure they have permission to live in Britain.
Failing to observe the rules can lead to fines of up to £5,000.
Already, more than 400 landlords have paid fines of almost £250,000 for breaking Right to Rules in the first 24 months after they were introduced in April 2016, according to a response by the Home Office to a freedom of information inquiry.
The JCWI claims the policy discriminates against immigrants who have a right to stay in the UK but cannot prove their residency status.
Chief executive of the JCWI, Satbir Singh, welcoming the court’s decision said: “Like many other aspects of the hostile environment, the Right to Rent creates real risks of status discrimination.”
The JCWI says their argument is backed by a report from David Bolt, the independent Chief Inspector of Borders and Immigration.
“Right to rent has yet to demonstrate its worth as a tool to encourage immigration compliance and that the Home Office is failing to coordinate, maximise or even measure effectively its use, while at the same time doing little to address the concerns of stakeholders,” said the report.
If a judge agrees with the JCWI at the review, this could mean the government will have to scrap Right to Rent laws.
The policy is supported by Prime Minister Theresa May, who introduced Right to Rent as Home Secretary.
Besides the legal challenge, the campaign to dump the policy has also whipped up cross-party support from several MPs, who are calling for a review of the scheme.
A date has yet to be set for the High Court review.