Distaste for rent controls in Wales

The Summary of Responses to the Green Paper Call for Evidence on Securing a Path towards Adequate Housing Including Fair Rents and Affordability has been published, which showed an aversion to rent controls being implemented as a long-term measure, a view shared by Propertymark.

Welsh Assembly

371 responses were received on areas including understanding rents, tenant and landlord behaviour, affordability, and approaches for how the Welsh Government could improve housing adequacy over time, including evidence on how to achieve this in Wales.

AFFORDABLE HOUSING

Based on the statistics known regarding rental costs and arrears, the Welsh Government states many people struggle to pay their rent. This is why they need views on how affordable renting is in Wales to provide a more accurate picture. This is mirrored when it comes to fair rent and affordable housing. Propertymark has long championed a Welsh housing survey modelled on the English equivalent to increase the collection of accurate data and statistics.

RENT CONTROL MEASURES

Multiple negative sentiments were expressed regarding implementing rent controls in Wales, citing evidence of rent controls failing in countries such as Scotland and stating it could potentially cause landlords to leave the PRS.

These echo Propertymark’s view that rent controls don’t work, with our recent research indicating that 95% of surveyed agents in Wales believe that rent controls will reduce supply.

We believe that The Welsh Government should focus on the urgent action needed to tackle insufficient supply to reduce the barriers to increased adequate housing. This is a view repeatedly seen throughout responses to The Green Paper.

ADEQUATE HOUSING

To understand how things are working now and assess what more needs to be done are key areas to gather evidence on, including what makes a home adequate, and whether it meets the needs of the people who live in it, considering it needs to be safe, secure, and affordable.

Houses in Cardiff, Wales
13 Oct 2023
Controls will not result in adequate housing and fair rents for Wales

Without introducing measures that tackle tenant demand and landlord costs, property standards will reduce, landlords will leave the sector and rents will rise. This has been evidenced when rent controls have been implemented across Europe and the United States and is currently the case in Scotland.

Propertymark’s views echoed in the responses

Other issues within the Call for Evidence include the seven factors of adequacy, with legislation already in place, it would be more advantageous to concentrate on better enforcement of this current legislation rather than legislate further. For example, to achieve security of tenure, the Renting Homes (Wales) Act 2016 has introduced increased notice periods for possession via a Section 173 Notice.

Plus, rental data needs should be at the smallest geography possible to reflect local characteristics. This could be obtained from the property portal websites which can provide information on advertised rents and dates provided by large agents and landlords every quarter showing rents achieved when a property was let.

Next steps to securing the path

Following contributions to the Call for Evidence, the Welsh Government is developing proposals for the White Paper consultation on housing adequacy, fair rents, and affordability which will be published in Summer 2024.

We are disappointed the prospect of damaging rent controls has been included in the widely supported debate of enshrining adequate housing into law, which we support. Given the substantial damage that rent controls have had on the private rental sector in Scotland, it would be a mistake for Wales to follow suit.

Instead, the Welsh Government should reinforce existing legislation, remove barriers to building more adequate homes and improve how they collect data. To this end, a far more equitable solution would be to stimulate the supply of affordable homes in the private rented sector,  by adopting progressive property taxation. One option open to the Welsh Government would be to reduce levels of Land Transaction Tax for landlords’ properties or exempt new long-term rental properties from the 4% LTT levy on additional homes.

Propertymark will continue to work with the Welsh Government to try and find solutions to building more adequate homes and avoid rent controls.

Tim Thomas
Tim Thomas Policy and Campaigns Officer | Propertymark