Rental reform: Wales' experience
The Renting Homes (Wales) Act 2016 represents a significant shift in Welsh housing legislation and is the result of over a decade of deliberation and drafting.
Twenty months on from the introduction of the Act, NRLA public affairs officer Mia Rotaru looks at the situation now, in the wake of England's new Renters' Rights Bill.
Initially started with credible intentions, the development of the Renting Homes (Wales) Act has revealed a series of challenges for the Private Rented Sector (PRS).
The Act was designed to create a rental system that is straightforward, fair, and transparent. Its primary objectives included:
• Simplifying tenancy arrangements
• Enhancing tenant rights, especially in cases of domestic abuse
• Ensuring that all rented homes meet basic standards for habitation
To achieve these goals, the Act introduced two main types of contracts: secure occupation contracts for community landlords (such as housing associations and councils) and standard occupation contracts for private landlords. This approach aimed to standardise rental agreements and improve clarity.
Another significant change was the requirement for landlords to provide six months’ notice for 'no-fault' evictions, a provision introduced by the 2021 amendments. This notice cannot be given until six months after the contract begins.
Implementation Challenges
The implementation of the Renting Homes (Wales) Act was frequently delayed as the Welsh Government made amendments or needed time to add secondary legislation, mostly because the timeframe wasn’t realistic and didn't give enough time for landlords to prepare for the transition.
This lack of time led to non-compliance issues, highlighting the unrealistic expectations placed on landlords by the legislation's rapid implementation. As a result, some social landlords are now facing legal challenges for failing to meet the newly established safety requirements within the available timeframe.
Consequently, the implementation of the reforms was abrupt and lacked a phased approach. All Assured Shorthold Tenancies (ASTs) and licences were immediately converted into occupation contracts on 1 December 2022. This sudden change forced landlords to navigate a complex conversion process without adequate preparation, leading significant legal trouble and confusion.
This approach contrasts with the Scottish model, which was introduced more gradually. The Scottish system applied the new regulations only to new tenancies, allowing existing tenancies under the old regime (Short Assured Tenancies, SATs) to naturally phase out over time. This phased implementation provided an easier transition and reduced the administrative burden on landlords.
An “extensive” communications campaign launched in January 2022 aimed to inform landlords and tenants about the new requirements.
This campaign included emails, texts, digital ads, radio and TV spots, and a dedicated website with guidance documents and model written statements of contracts. However, many landlords struggled to understand their new responsibilities, highlighting a need for more robust training and educational resources.
Indeed during the time of implementation, the NRLA kept members in Wales up-to-date with regular webinars with our policy team, as well as updating online resources for members in Wales.
This support was recognised in the “Phase One” evaluation report of the Implementation of Renting Homes Wales Act, by the Welsh Government, with one excerpt reading:-
“All private landlords who had received guidance from the NRLA felt it had been very supportive and had given them appropriate and correct information. Participating landlords valued the NRLA landlord support line and praised the Association for being proactive in publicity through press releases and email".
This said, while some tenants were informed about the Act through their landlords or the media, others were either unaware or had not fully grasped how the Act applied to their situations. Landlords also expressed difficulties and concerns in conveying complex information to tenants, leading to apprehensions about misinformation due to the complexity of the changes.
Expectations and Responses
Prior to the Act’s implementation, stakeholders had several expectations:
• Improved tenant rights and awareness
• Simplification of the rental process through a unified legal framework
• A more balanced dynamic between tenants and landlords/managing agents
Opinions about the expected changes differed. Some landlords and managing agents anticipated that the Act would make their jobs significantly harder, while others felt it provided a clearer understanding of expectations.
The Renting Homes (Wales) Act was also expected to strengthen measures against anti-social behaviour and improve tenant security by making it more difficult to issue Section 21 notices and extending the no-fault notice period from two to six months.
However, concerns were raised about the Act’s effectiveness and its impact on compliant landlords. Although it aimed to improve the housing sector, landlords expressed concerns about the increased administrative and financial burdens, which could be more harmful than beneficial for the PRS, potentially driving private landlords out of the market.
Figures from the Ministry of Justice reveal the reforms’ impact on landlord confidence, with the number of accelerated possession claims increasing by 236% in the year to Q1 2023, immediately after the Act’s implementation. By comparison, claims increased by just 16% in England in the same period.
The absence of clear guidance left many landlords uncertain about their obligations and how to comply with the new regulations. This uncertainty, combined with the fear of being unable to resolve disputes promptly due to the congested justice system, led to a surge in possession claims in Wales.
The situation now
Almost two years have passed since the implementation of the Renting Homes (Wales) Act, yet some issues persist.
One of the primary objectives of the Renting Homes (Wales) Act was to simplify tenancy agreements. However, instead of providing clarity, the Act has introduced confusion into the market, resulting in insecurity and instability among landlords.
The difficulties faced by landlords and tenants with the Renting Homes (Wales) Act should serve as a valuable lesson for the upcoming Renters' Rights Bill.
Recognising the challenges faced in Wales will help with the implementation of the Renter’s Rights Bill and will help to maximise the benefits for both tenants and landlord.
A phased approach should be considered to have a more practicable transition, giving landlords time to adapt and understand the new requirements while reducing the risk of non-compliance.
- To keep up-to-date with all the latest news on the private rented sector in Wales, visit our webpages here
- Want to learn more about the Renting Homes (Wales) Act? See our Wales resource hub: https://www.nrla.org.uk/wales
