Blog: Wales legislative update
With Renting Homes Wales set to come into force from July 15 2022, the Welsh Government is busy producing the additional legislation and materials required to implement the Act.
However, it isn’t the only legislative change set to come in in Wales. So far in March, the Welsh Government has taken steps to increase council tax on second homes and holiday lets, as well as inviting the NRLA to provide evidence on second homes at the Local Government and Housing Committee.
Renting Homes (Wales) Act 2016: An update
From July 15, most of the rules around renting will change in Wales. Guidance on the main changes is available for members from here. However, a number of outstanding matters still needed to be addressed including –
- Prescribed forms and notices for ending agreements, increasing rents, etc
- Deposit information
- Treatment of belongings left in abandoned properties
Prescribed forms
This legislation has now been laid and landlords can find examples of all the new prescribed forms available here. As these forms are prescribed, landlords in Wales will have to ensure they use these forms for –
- Providing their name and address
- Changing the landlord
- Serving any possession notice
- Withdrawing possession notices
- Abandonment notices
- Adding a new contract holder
- Transferring a contract
- Increasing rent
The NRLA will be producing completion notes around these documents to help our members fill them in correctly. They will appear on site over the coming months ahead of the implementation date.
Deposits
Replacing the existing prescribed information regulations, landlords in Wales will have to provide new prescribed information on how the deposit is to be protected.
As is currently the case, under RHW deposits must be protected in a scheme and the prescribed information issued within 30 days.
Normally landlords are not required to reissue this prescribed information. However, leading up to July 15 2022, landlords should pay attention to communications from their deposit provider on what they will need to issue regarding their deposit.
Belongings left in abandoned properties
The Renting Homes Wales Act allows landlords to take possession of a property without court order where they have genuine reason to believe the property is abandoned. To do this landlords must –
- Serve a prescribed abandonment notice on the property, giving four week notice to the contract holder; and
- During the 4 weeks, try to establish the property is abandoned by contacting any of the contract holders’ family, guarantors, support workers, etc, that are known to the landlord.
If, at the end of the fourth week the property does appear to be abandoned, the landlord may retake possession without court action. Property left by the contract holder must then be safely stored for a further four weeks unless –
- The goods are perishable and storage would be unnecessarily inconvenient to the landlord; or
- The goods are less valuable than the cost of reasonable storage over that time period.
Council tax premium updates
Owners of vacant or second homes in Wales may face council tax increases of up to 300% from April 2023.
The Council Tax (Long-Term Empty Dwellings and Dwellings Occupied Periodically) (Wales) Regulations 2022 allow local authorities to charge a premium of up to 300% on council tax where the property is vacant long term or a periodically used furnished property.
This is part of the Welsh government's ongoing policy to curb second homes in popular locations across Wales. Currently councils can charge a second home premium of up to 100%. To apply this council tax premium local authorities must establish the property is either a long term empty dwelling, or a dwelling that is occupied periodically.
- Long term empty dwelling - A property that is unfurnished and has been vacant for at least 1 year continuously.
- Periodically occupied dwelling - A property that is substantially furnished but vacant
Local authorities will have to develop their own policies on how to use this premium. However, they must consider any guidance published by the Welsh Government when developing these policies. The NRLA will continue to push for clear guidance from the WG to ensure local authorities do not apply the premium to furnished properties during void periods.
Local government and Housing Committee on second homes in Wales
Last year the NRLA responded to a consultation on second homes in Wales.
In our response, we made the case that landlords should be supported in providing homes for local residents. We also highlighted how the current tax system can incentivise PRS landlords to transition into the holiday let market, creating perverse incentives that reduce supply at a time where demand is growing for PRS homes.
Douglas Haig, non-executive director for Wales, was invited this week to speak further on this topic, making the case for removing the additional Land Transaction Tax on properties that will be used for long term rents.
He also highlighted the need to improve landlord confidence in Wales, citing a recent BDA-BRC survey of NRLA members that found 70% of members reported increasing demand, while 37% of landlords planned to reduce their portfolio.
Renting Homes Wales training requirements for licence holders
All Rent Smart Wales licensees who have received their licence since July 2020 must complete approved training by the 15 October 2022 on Renting Homes Wales because it is a condition of their, or their employers, Rent Smart Wales licence.
Alternatively, you might opt to do this training as Continuing Professional Development (CPD) to broaden your knowledge or to be able to submit a licence application. This course is mandatory if you are renewing your licence application with Rent Smart Wales and relying on CPD to meet the training requirement.
The NRLA has been working closely with Rent Smart Wales and is now offering approved training on the Renting Homes (Wales) Act 2016 prior to its implementation on the 15 July 2022.
