The Welsh Government has launched a consultation on ‘fair rents and adequate housing’ within which housing minister Julie James (main picture) reveals she is considering rent controls.
The consultation asks for the views of those within the private rented sector on a wide range of subjects linked to affordability, supply and demand and what constitutes ‘fair rent’.
But it is the section on rent controls that will alarm many landlords, who had thought the Welsh government had rejected rent controls following a debate in the Senedd during October 2022.
Now, James says: “I am committed to using all the levers we have to ensure we maintain a viable private rented sector here in Wales, offering high quality and choice of accommodation, where landlords have confidence to invest in making improvements and tenants have greater certainty that longer term costs of moving into or staying in a rental property will be affordable,” says James.
The consultation explores four potential rent control measures including a ceiling or freeze; limiting annual rent rises to pre-agreed percentages and only allowing rent rises when a tenant moves out and the property is advertised afresh.
Welsh landlords could also face rent restrictions based on limits to yield using a formula, and a ‘costs plus’ model.
But all this is up for debate and the NRLA is urging landlords with properties in Wales to get involved in the consultation, which follows an earlier Green Paper.
Ben Beadle, Chief Executive of the National Residential Landlords Association, says: “Let’s be clear, rent controls would serve only to decimate the sector further and would be a disaster for tenants, when so many are already struggling to find a place to rent.
“The Minister herself diagnosed the issues when she rightly rejected calls for a rent freeze before Christmas.
“The same reasons apply now. We all want to see more homes available to rent but adopting the tried and failed ideology of rent controls is not the way to do it.
“The best way is to introduce pro-growth measures to increase housing supply that will reduce costs for renters.
“Now is the time for landlords to get involved and for the Welsh Government listen carefully to the views of those providing much needed homes.”
To submit your views, visit the consultation website.
Timothy Douglas, Head of Policy and Campaigns at Propertymark, says: “Propertymark does not agree with rent controls as they disincentivise investment and lead to low stock levels and reduced property standards. We have also seen that they inflate advertised rents which is most recently evident in Scotland.
“The failures of rent controls have also been evidenced time after time again across Europe, and the United States.
“We believe that there must be a clear focus on introducing measures that satisfy tenant demand and ease landlord costs in order to increase the number of properties to rent and buy across Wales.
“We all want to see a thriving, safe, and secure private rented sector in Wales, but in order to do this, the Welsh Government must ensure the shortage of housing is addressed and not inadvertently exacerbated.
"In recent years, tax and mortgage rate changes have squeezed the budgets of many landlords, and the shortage of housing supply fails to keep up with rising tenant demand, impacting rent levels, the cost of living, and the overall renting of property in Wales.
“We will continue to engage with the Welsh Government with these warnings and encourage agents operating in Wales to respond to the Welsh Government’s Green Paper."