An update on rent controls and other developments in Wales
Welsh Government's much-anticipated White Paper on Fair Rents, Adequate Housing and Affordability was published last month, October 2024.
A pivotal step in the legislative process, it outlines the government’s intentions for the sector, offering insight into the potential direction of future policies and laws. It follows up on the 2023 Green Paper, which we commented on at the time.
The lengthy consultation period for the Green Paper, the significant gap before the release of this White Paper, and now the additional three-month consultation suggest that these decisions are being given thorough and careful consideration, rather than rushed or made on-the-fly.
CPS Homes’ perspective: Key insights
Below are our key insights and takeaways from the White Paper:
No rent controls: We’re pleased to see a rejection of rent controls, which we believe would drive landlords out of the sector and exacerbate current supply issues. The White Paper confirms that Welsh Government shares this view. This decision is a positive step for maintaining landlord engagement and stability in the market.
Rent increases: That said, Welsh Government will closely monitor the implementation of England’s Renters’ Rights Bill. Across the border, the bill plans to cap rent increases at the lower of the market rate or the landlord's proposed amount, and tenants will be able to contest increases through the First-tier Tribunal, with no rent hike taking effect until the tribunal makes a decision. In Wales, there is currently no limit on how much rent can be increased, which was somewhat surprising when the Renting Homes (Wales) 2016 Act was published, since rents on pre-RHWA tenancies were capped at market level. It was believed – perhaps optimistically – that market forces would be relied upon to ensure rents are not set above market rates. However, it now appears that Welsh Government seeks to address this omission, potentially taking a different approach than England. They are considering involving Welsh Rent Officers to adjudicate on rent increase notices, with appeals handled by the Welsh Residential Property Tribunal.
Data collection: The Government aims to capture more data to make informed, evidence-based decisions for the sector. This includes gathering detailed market rent data to better understand the costs of renting in the private sector. One proposal is for landlords to submit annual rent data through Rent Smart Wales. Additionally, there is interest in requiring landlords to provide an annual update and declaration regarding the condition of their property, likely including confirmation of valid gas and electrical safety checks, appropriate smoke and carbon monoxide alarms, and no hazards related to Fitness for Human Habitation. This ‘overview of condition’ could be made accessible to prospective contract-holders, offering assurance that the property they’re considering renting has an up-to-date property record. While this will add administrative work for landlords, it could help improve policymaking.
Local authorities to act as guarantors: To help remove barriers to renting, Welsh Government proposes serving as a guarantor for prospective occupiers who face challenges proving their reliability. Initially, the government plans to develop national guidance on rent guarantorship to support local authorities in confidently serving as guarantors for contract-holders. However, unlike traditional guarantor agreements, this scheme would only cover unpaid rent and would not allow landlords to claim for damages as well. As a result, landlords will need to assess their willingness to accept this level of risk.
Permitted pet insurance payments: There are plans to revise the Renting Homes (Fees etc.) (Wales) Act 2019, allowing landlords to request that contract-holders pay a premium for a pet insurance policy. This is a positive, practical move that could help reduce risks associated with renting to pet-owning households. There are no plans to grant occupiers the right to request a pet or make it difficult for landlords to decline.
Final two months’ rent-free when asked to leave: This proposal wasn’t included in the White Paper but was featured in The Local Government and Housing Committee’s report published around the same time. While Welsh Government is not obligated to implement the Committee’s recommendations, their proposals are well-supported by research and public input, which may influence future policy. The report does not propose an outright ban on no-fault evictions like England plans to introduce (with some limited exceptions), but it does include a concerning suggestion: contract-holders given six months’ notice to vacate under a Section 173 notice would not be required to pay rent during the final two months of their tenancy, framing this "rent-free" period as compensation for the forced move. This would increase financial risks for landlords. While unlikely to impact the student market – where it’s rare for landlords to issue notice to leave – it would place an additional financial burden on small landlords in an already undersupplied market. Larger institutions backed by corporate funds would likely be unaffected, prompting us to question why government policies continue to target small, hardworking landlords while large businesses remain exempt.
Conclusion
These proposals build on existing policies but will require additional legislation to be implemented, assuming there is continued appetite to do so following the consultation period. As indicated in the White Paper, these changes are long-term, meaning they are unlikely to be realised in the immediate future. Ultimately, the final details of any proposed changes will need to be reviewed.
Landlords are encouraged to participate in the consultation period, which runs until 31st January 2025.
Need extra support?
At CPS Homes, we've become the go-to agent for landlords looking for ironclad contracts and complete legal protection. Many property owners have come to us after their current contracts fell short, and we've been able to help. If you have any questions or require assistance with reviewing your contracts, please don't hesitate to contact our team on 02920 668585 or email lettings@cpshomes.co.uk.
The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.
