North Wales MS and Shadow Minister for Housing and Planning, Mark Isherwood, has warned in the Senedd this afternoon that Welsh Government Legislation is driving landlords out of the private rented sector.
In Spokesperson’s Questions to the Cabinet Secretary for Housing, Local Government and Planning, Mr Isherwood quoted figures from the ‘Renting Homes (Wales) Act 2016 Evaluation: Phase 1’ report published last week.
There were 676 responses to the Survey of landlords and managing agents, of which 539 were fully completed and 479 cited a negative impact of the changes for landlords.
Mr Isherwood also challenged the Minister over the Welsh Government’s proposed rent controls, which he warned would force more landlords to sell up.
He said:
“The Renting Homes Wales Act 2016 was the biggest change to Wales’s Private Rented Sector in decades - and the Explanatory Memorandum for the Welsh Government’s subsequent Renting Homes (Amendment) Bill 2020 stated that: ‘The private rented sector plays an important part in meeting the housing needs of the people of Wales’ and that the Welsh Government wishes ‘to ensure there is the right balance of support and regulation in the Private Rented Sector’.
“In this context, the ‘Renting Homes (Wales) Act 2016 Evaluation: Phase 1’ Report was published last week. There were 676 responses to the Survey of landlords and managing agents, of which 539 were fully completed and 479 cited a negative impact of the changes for landlords.
“One question respondents to the evaluation were asked was: ‘What negative impacts will the changes under the Act have on you as a landlord/managing agent?’
“44% of all the respondents who cited a negative impact to the survey stated that the Act was forcing Landlords to sell and leave the sector.
“As I stated during the legislative process of the Renting Homes (Amendment) Bill 2020, this is what ARLA Propertymark, the professional and regulatory body for Letting Agents, and the National Residential Landlord’s Association both warned would happen.
“So, given your words in 2020 that you wished to strike ‘the right balance of support and regulation’, what action, if any, will you now take to re-open the legislation to ensure that the Act stops driving good landlords from the Private Rented Sector?”
Mr Isherwood went on to question the Cabinet Secretary over the Welsh Government’s plans to introduce rent controls.
He said:
“Between January 2015 and June 2022 private rental prices in Wales rose by 8%, compared with 12.6% across the rest of the UK.
“Despite this, it is understood that the Welsh Government is still considering the introduction of rent controls.
“Research evidence shows that rent control policies can lead to reduced market supply – as well as a range of other housing and labour market problems.
“Since the introduction of Rent Controls in Scotland in 2022, average rents on new tenancies have increased, rising by nearly 14% in the last year as rents on existing tenancies have been frozen and then capped, and there has also been a reduction of nearly 20% in the availability of private rented properties in Scotland over the last year.
“A recent YouGov poll showed that nearly 40% of Private Landlords said they would reduce the number of properties they let even with a ‘light touch’ intervention.
“If landlords are unable to meet rising costs, many will reduce their portfolios, exacerbating current Private Rented Sector-supply difficulties and reducing the availability of rentable first homes.
“So, rather than dealing just with the symptoms, what, if any, policies does the Welsh Government have to actually increase rental housing supply, the shortage of which is the reason, or the primary reason, why rental prices have increased?”
