T-T: Forgetting foreign licences for a second, I found a West Country club with their own special interpretation of JAR currency which they imposed on their JAR pilots. ( Funnily enough it worked financially in the clubs favour...
) I don't challenge they have the right to impose whatever they want on their members, (who can take theirtrade elsewhere if they don't like it) but this was very definitely passed off as a legal requirement due to JAR rather than a local club policy - great idea for causing general confusion and arguments.
Back to foreign licences:
The easiest thing is to have an aircraft registered in the same country as your licence was issued, then things are 'perfect'. However for a SA licence and 'G' reg aircraft in the UK, if you want it from the (UK) horse's mouth, try
CAA FAQ on using foreign ICAO Licences in the UK
For those who would fall asleep if they clicked on that link, basically, a fully valid S.A. PPL (including medical) is good without extra paperwork for renting for fun in UK registered aircraft in the UK FIRs, providing you obey your licence privileges and relevant Uk law. SA PPL with SA I/R will NOT let you go IFR in Controlled Airspace. SA CPL, ATPL give private privileges only (so no money earning in G reg unless you also have a UK/JAA professional licence).
If you have a SA PPL and decide to stay a fun flier in UK airspace, you are not forced to convert to a JAA PPL, but many do convert to be able to add things like UK IMC ratings or perhaps to fly in Europe. It is easier to convert after 100 hours than before, so many rent on a foreign PPL in the UK up to 100 hours, then convert. If you intend to start a JAA CPL flying course once you have the extra required hours, I don't think you need to convert to a JAA PPL at all - you can keep the SA PPL all the way until you get your JAA CPL issued (I believe).
I can quickly think of 3 main reasons why some rental clubs want you to convert, and I think number 1 is the main one - some genuinely don't know the rules.
1- Clubs have not actually asked the question recently. Our CAA (10 years ago) used to be a little bit deaf and somehow always 'mis-heard' the question. Question posed by either the club with a potential renter or the renter: "can a pilot fly in the Uk on a foreign PPL?" Answer: "To convert your licence to a UK licence, what you need to do is pay us £192, pass the following... etc etc"
This answer not only earned money for the CAA, but money for the clubs, so everyone was happy (funnily enough, including the PPL holder who just wanted to do whatever was necessary and had no idea he had been conned with an answer to a different question!).
I used to have fun briefing the foreign PPL holder before they phoned the CAA. They would then ask the question, listen politely to the standard misleading answer, then when that was finished, just say 'fascinating - now can you answer the question I asked you' and of course there would a short silence and finally the real answer came. Anyway, staff and attitudes have changed and now you get the true answer on the CAA FAQ page.
2- Occasionally you might find a club may have had a problem in the past with one or two new pilots trained in the USA and just decided to 'blanket' everyone. Purely their own commercial decision - they can have whatever rules they want on their aircraft. Loss on some rentals will be partially offset with extra training and conversion by others. From what I can gather though the problem can often be traced to the attitude of the pilot rather than the training of the pilot.
3- Sometimes long time renters with foreign PPLs have been found after an incident not to be fully legal, (eg: some foriegn licences are type rated, some are not, some last 2 years, some last one, etc etc) and the school cannot keep up with all the requirements of different foreign authorities so it decides not to try.