Thinking about the Private Rented Sector

The Senedd’s Local Government and Housing Committee report on the private rented sector (“PRS”), which was published in October 2024, makes for quite depressing reading.  The report reminded me about the uncertainty of the role of the PRS and whether it has a significant (or any) role to play and, if so, what role in housing provision.  There is so much that could have been said that was left unsaid by the Committee (although the evidence before them was wide-ranging).  And, to be honest, there was stuff written about Article 1 of the First Protocol to the European Convention on Human Rights (protection of property) in the context of getting rid of “no fault evictions” that I just didn’t understand at all (although there was a great point made by the cabinet secretary about the infuriating nature of that label: [70]).

The report opens with a view that there has been a sense of drift in the development of the PRS – particularly emphasised by the former cabinet secretary’s comment that the Welsh Government did not have “a particular vision for how large the sector should be”.  There is, as the committee observed, a need for a vision and strategy.  Is there a sense that the PRS is kind of a necessary evil until the social housing supply can meet the needs of the population?  We “know” (to the extent that anything is known about the PRS is, in itself, a known unknown) that the sector provides accommodation for around 17% of the population and that this is segmented.  For example, there is an interesting discussion about the needs of students and the problems of purpose built student accommodation (something in which I am really interested) but there isn’t much by way of concrete proposals here; there’s discussion about the elderly and those in need of care and support, but (again) the discussion of adaptations isn’t really that helpful.

One of the questions raised is about the effect of Renting Homes (Wales) Act on supply in the sector.  The common refrain of landlords is that this kind of significant change will lead to flight from the market.  I’ve certainly heard that in the course of recent research.  But, the actual evidence of sector exit is unclear (perhaps because of inaccuracies in the data anyway).  Reliance on court -based evictions data faces the problem that most evictions are not court-based, so it isn’t a proxy for anything except perhaps the requirement of local authorities to go through with that process before accepting an application for homelessness assistance.  The discussion in the report on this point is unhelpful.

Equally, the discussion about whether to retain the “no fault ground” (ie mandatory possession ground following notice given for a certain period) is not wildly helpful.  We need to have a clear position on this issue in Wales (although my view is the same as the cabinet secretary, it is still a point of principle).  Here, though, the committee offer this statement

We believe the Welsh Government should closely monitor the situation in England and Scotland and should commit to ensuring that if Wales is the only British nation to retain the no-fault ground, this does not mean tenants in Wales are worse off. In the meantime, we believe that a pragmatic approach is to put in place measures to protect tenants as much as possible from homelessness when possessions occur. To this end, we welcome the requirement for no-fault evictions in Wales to have a six-month notice period … However, we also see merit in the approach suggested by Generation Rent for financial compensation for tenants who have to move through no fault of their own by allowing them to retain the last two months’ rent as compensation for the financial and wellbeing impacts of a forced move.

I don’t necessarily think that this issue of principle is somehow a race to the top (or bottom, depending on your perspective) among the devolved governments.  It requires a Wales-first set of understandings drawing on the context of the PRS and other broader factors.  It doesn’t reflect the fact that, as the cabinet secretary properly argued,  there are “large numbers of grounds on which a landlord in England and Scotland can take possession of the house that are no-fault evictions” even if we get rid of the notice based ground.  A little bit of nuance would have gone a long way here.

The two most interesting and, to my mind, most important related discussions are almost a side show: the point about whether to have the same housing quality standards for social housing and the PRS; and about local authority enforcement of housing standards.  The former is a theme that runs through the discussion, partly as a result of comment from Edith England.  We can have different opinions about this (and, I think, probably do) but there is a discussion to have about equivalence of property standards.  Whatever view you take, there needs to be scope for enforcement, and, it seems, better enforcement by local authorities.  We know that they are underfunded.  We also know that there are issues of principle about the English reliance on civil penalties as an enforcement tool, but there is surely grounds for extending their role to Wales, if for no other reason that they can cause a change in enforcement practices to more proactive roles.  The discussion in ch 6 on enforcement is distinctly “old school”.  (I do have some skin in this game, having written on this issue recently – no brag intended; just to note that the debate has moved on).

So, all-in-all, a not unhelpful report of the state of the sector, but …