Could Wales soon emulate England's new housing laws?
On Wednesday, the UK Government unveiled its ground-breaking Renters’ Rights Bill, which is set to transform England’s private rental sector and offer tenants greater protection.
Potentially in effect as early as Spring or Summer 2025, we take a peek 'over the fence' and list the key differences this game-changing legislation will create between our two neighbouring nations.
With Labour now holding power in both the UK and Welsh Governments, could Wales' existing laws soon be adapted to match the new laws that will come in in England? Let's wait and see...
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England: An end to Section 21 notices, so no more ‘no fault evictions’. Notices served before the Bill comes in will be valid.
Wales: Landlords can issue contract-holders with a notice to leave without needing to specify a reason. The notice period they must give is six months. To do this, they serve a RHW16 notice, not a Section 21 notice.
Our view: If the English bill gets passed in its current form, this element of it will create a huge difference in housing law between England and Wales. Landlords in England won’t be able to regain possession until specific grounds apply (see later), thereby creating unlimited tenancies if the tenant wants to remain and none of those grounds apply. Landlords in Wales have much greater flexibility. Yes, they need to wait six months before they regain possession, but at least they don’t have to have an applicable reason to do so.
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England: New ‘landlord circumstance’ grounds. If a landlord wishes to sell, they’ll be able to rely on a ground specific to that scenario. Similarly, if they or their family needs to move in, there’s a ground for that. Neither can be used in the first 12 months of a tenancy, they’ll need to give four months’ notice to use them, and they can’t advertise the property for 12 months after the notice expires or the court claim is filed.
Wales: These grounds don’t exist and aren’t required in Wales because landlords can issue contract-holders with a notice to leave without needing to specify a reason.
Our view: Landlords in Wales can regain possession for any reason, not just these specific reasons, which is a plus to being on this side of the border. English landlords will take some solace that they at least have some way of regaining possession, but even then, the notice requirements appear long.
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England: No more fixed-term tenancies. They’ll all be periodic and tenants will be able to issue two months’ notice to leave at any time.
Wales: Fixed-term contracts still exist, as do periodic contracts. Contract-holders cannot serve notice to leave a fixed-term earlier than its end date.
Our view: Another big difference between our neighbouring countries. Landlords like fixed-term tenancies because they offer a guarantee of tenure and, assuming the tenant is a good payer, a guarantee of income. Fixed-term tenancies allow them to plan ahead, so their abolition in England will create a sense of “what if?”. What if the tenant issues two months’ notice to leave and a new tenant can’t be found for a while afterwards? What if the notice ends at an awkward time of the year to let a property, e.g. around Christmas/New Year? What if it scares buy-to-let mortgage lenders – initially or permanently – into not lending as they don’t like the risk of tenants leaving with minimal notice? Thankfully, landlords in Wales can offer fixed-term contracts, and the vast majority do.
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England: Amendment to mandatory rent arrears ground: now requires three months’ arrears and a four-week notice period.
Wales: The mandatory rent arrears ground amount is two months’ rent and the notice period landlords must give contract-holders before issuing court proceedings on that ground in court is 14 days.
Our view: By “mandatory rent arrears ground”, we mean “the minimum amount of rent an occupier must owe before a landlord can serve a notice to regain possession because of the arrears, and the court must award possession if that ground can be proved”. The proposed bill means that, compared to their Welsh counterparts, landlords in England will need to wait for an extra month’s arrears to accumulate before issuing a notice to go to court, which could mean they’re hundreds or even thousands more pounds out of pocket. They also won’t be able to commence court proceedings until two months after the notice is served, which is significantly longer than the 14 days Welsh landlords have to wait.
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England: A new student possession ground has been introduced, requiring prior notice from the landlord and applying exclusively to HMOs rented entirely to students.
Wales: This ground doesn’t exist and isn’t required in Wales because landlords can issue contract-holders with a notice to leave without needing to specify a reason.
Our view: Landlords in Wales will be grateful that they don’t need to navigate this possession ground. England have only created it because they acknowledge that, by only allowing landlords to regain possession if they’re selling, moving in or there’s been a breach of tenancy, a group of students could opt to stay indefinitely. If they then choose to leave in December, for example, the landlord is unlikely to find another group to take the house until the new university term starts in September, meaning a big void period. Notably, landlords will only be able to use this possession ground if the property is let entirely to students. We know that many HMOs are a mix of students and non-students, so the ground doesn’t fully fix that situation. Landlords in England may need to be more strict on allowing “student only” groups.
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England: Prohibit discrimination against tenants receiving benefits or those with children when selecting tenants.
Wales: Welsh legislation is silent on this topic.
Our view: It would be wrong for a landlord to discriminate against prospective occupiers just because they’re on benefits or because they have children. At best, it could be classed as indirect discrimination under the Equality Act 2010. A landlord may have application criteria that they require applicants to meet, such as affordability and references. If a prospective occupier meets this criteria, they should be granted a tenancy.
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England: Prohibit bidding wars by preventing landlords and agents from promoting or accepting rents higher than the advertised rate.
Wales: This situation is not legislated for in Wales.
Our view: In our experience at least, agreeing lets at over and above the asking price doesn’t happen, and it wouldn’t sit well with us if it did. It may exist in other parts of Wales or in England, but it’s certainly not common practice. As is always the case with supply vs demand, if there’s a lot of demand, the cost of the supply will rise. We know our market, so we know the demand a property will receive and we price it accordingly. Needless to say, bidding wars wouldn’t need to happen if there was more supply, which is on the Government. What’s more, this increasing red tape on landlords means more and more are selling up, thus reducing the supply further…
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England: Limit rent increases during a tenancy to once per year, capped at the lower of market rates or the landlord's proposed amount. Landlords must provide two months' notice, and tenants can contest the increase through the First-tier Tribunal. No rent hike can take effect until the tribunal reaches a decision.
Wales: Landlords can only vary the rent in a periodic contract and they must give two months’ notice. It can only be increased once per year, but there is no limit and - curiously - there is no provision in the legislation for an increase to be challenged.
Our view: Whilst England are attempting to curb and delay rent increases through legislation, perhaps refreshingly, Welsh Government appear to be relying on market forces to dictate that rents aren’t set above market level.
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The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.
