Wales rules out private rent control

The Welsh Government has ruled out rent controls in the private rental sector for the time being, referencing recent evidence from Scotland. In a newly published white paper, the Government sets forth alternative measures to improve housing conditions and affordability without rent caps, focusing instead on gathering data and introducing incentives to tackle affordability and supply issues in the rental market.

In 2022, the Scottish Government introduced temporary rent caps and an eviction ban to manage rising living costs. Although these measures ended on 31 March 2023, Scotland now intends to implement permanent rent controls under a new Housing Bill. Despite this commitment, the measures have stirred concerns among investors, with the Scottish Property Federation reporting that of the 14 major investors managing a combined £15 billion in build-to-rent assets, nine found Scotland unattractive for investment. Four investors deemed Scotland “uninvestable” due to current rental restrictions, fearing long-term rent controls might deter new developments and reduce rental stock.

Citing this evidence, the Welsh Government has taken a more cautious approach. The white paper highlights that without a robust, localised dataset on market rents, rent control could inadvertently reduce private rental availability in Wales, potentially raising costs and increasing homelessness risks.

The Welsh Government’s new strategy seeks to build a reliable, localised evidence base on rental prices by developing a “spatial rent map” of Wales. This data-driven approach is intended to provide a clearer view of affordability and availability in different areas, enabling more targeted interventions where necessary.

The white paper proposes mandatory reporting of rental data to Rent Smart Wales, the national landlord registration scheme. This will improve data on actual rental costs, distinguishing market rents (what tenants pay in current agreements) from new rental asking prices, which are often higher.

Such an approach is intended to help policymakers understand affordability pressures across regions, particularly in high-cost or low-availability areas. This informed approach could also help mitigate affordability challenges before they become acute, providing policymakers with a proactive tool to monitor and address affordability in real time.

The white paper proposes several incentives for landlords to help tackle vacancy rates and increase private rental availability. Key among these is a tax relief for landlords who let empty properties to local authorities. Homes signed up to the Wales Leasing Scheme, for durations of five to 20 years, could receive relief from higher rates of land transaction tax. This scheme aims to reduce vacancy rates and ensure more homes are available for rent, alleviating pressure on the housing market.

In addition, landlords letting to local councils would gain greater assurance of steady income, while local authorities would benefit from an increased supply of affordable housing options.

Improving Housing Standards and Accessibility

Beyond rental affordability, the white paper outlines proposals to ensure higher standards in private rental homes. These include setting clearer criteria for determining whether a property is “habitable” and providing specific guidelines for tenants with pets. To support responsible pet ownership without penalising landlords, proposed guidelines would allow landlords to cover pet-related damage via an additional insurance premium. This proposal aims to reduce barriers to renting for pet owners while protecting landlords’ interests.

Establishing a Comprehensive Housing Strategy

The white paper also introduces a requirement for Welsh ministers to produce a national housing strategy, which public bodies would take into account in their housing-related planning and policies.

The white paper’s publication, which follows a green paper released in June 2023, has opened a consultation period that will run until 31 January 2024. This consultation invites input from landlords, tenants, industry experts, and the general public to refine and enhance the proposed policies.

CLA Cymru will be gathering information to inform the consultation over the coming months.

For more information and to get involved, please contact CLA Cymru at wales@cla.org.uk. Book events online here or call 01547 317085.