Renting Homes (Wales) Act: Transition uncertain
Introduction
This is the third post which draws on the Summer 2022 non-member landlord survey. It summarises Welsh landlords' views on the Renting Homes (Wales) Act prior to it coming into force on the 1st December 2022. Though the sample was drawn from an independent market research company, the laws of probability meant that a number of participants were NRLA members.
This post focuses on landlords who rent residential property in Wales. Approximately 40 (37 in total) landlords were questioned on policy affecting Wales.
About the Act
The Renting Homes Wales Act represents a major change in how the private rented sector in Wales works for landlords and tenants. Changes include:
i) Occupational contracts replacing traditional assured shorthold tenancy agreements.
ii) Revisions to possession grounds and notice periods.
iii) Ensuring homes are fit for human habitation – this includes changes to smoke and carbon monoxide rules.
Awareness of the Renting Homes Wales Act
The survey sought to find out how well the Act had been publicised. Landlords were asked whether they had heard of the Renting Homes (Wales) Act.
- Overall, just under two-thirds of landlords with properties in Wales reported being aware of the Act.
Most landlords surveyed were aware of the upcoming change to legislation. However, at the time the survey was conducted, with less than four months before the legislation took effect, the survey found that one-fifth of landlords remained either not aware or unsure of the legislation and what it meant for landlords and tenants.
The Government's approach to implementing the Act
Landlords were asked to assess the government’s performance in the delayed introduction of this piece of legislation. Questions focused on the delivery of change and the support for landlords attempting to implement those changes.
Typically, landlords in Wales think government delivery, support and overall implementation of the changes which are embedded in the Act has not been good enough:
- Almost half of those landlords surveyed felt Welsh Government help and guidance to landlords which would help them remain compliant was “poor”.
- Only a third of landlords felt the overall level of communication on this legislation from the Welsh Government was “Good”.
Landlord views of the Act's likley impact
Landlords were asked what they thought were the key takeaways from the Renting Homes (Wales) Act. Comments included:
“Change in favour of tenants.”
“Tenants will have more rights and bad tenants will be harder to deal with.”
“I will probably sell my rented properties.”
“Increase in bureaucracy and regulations from Welsh government without appreciable. benefits. The Welsh Senedd's politically driven beliefs [are] driving landlords to quit.”
“Just getting ready to do the best I can do.”
Responses such as these highlight landlords’ discomfort with the details of the Act. Many have concluded the Act will tip the scales in the favour of tenants; a feeling which is echoed when landlords were asked about the challenges the Act may bring.
Concerns and challenges for the future
Landlords were asked what their expectations were in moving forward with the new legislation in mind. Responses to this question show that landlords anticipate the Act will result in “increased costs” and “more paperwork.”
Several responses also focused on possible difficulties regaining possession where there is reason to do so.
- One landlord noted that it will be “harder to evict troublesome tenants.”
The Act introduces Section 173 which is classified as a ‘no fault’ possession notice – which draws comparison to Section 21 in England.
- However, the longer notice period of 6 months which is now required in Wales impedes a landlord’s ability to act swiftly when dealing with anti-social tenants.
Despite the existence of a discretionary ground requiring just 24-hours’ notice for anti-social behaviour, research elsewhere has consistently demonstrated just how difficult it is to gain possession via discretionary grounds: See for example the NRLAs forthcoming consultation report on the PRS White Paper.
Summary of challenges
Landlords with properties in Wales were asked to sum up in their own words what they thought the main challenges this legislation would bring.
Several responses – for example “don’t know” and “unknown” – highlight the criticism that the Welsh Government needs to better communicate the exact obligations being placed on landlords.
One landlord response neatly illustrates this frustration: stating the biggest challenge in implementing the legislation was simply “public awareness”.
Increase in bureaucracy and regulations from Welsh government without appreciable benefits.
Also featured were references to the necessity of rent increases to “cope with the changes” and the possibility of a “smaller stock of rental properties” being a consequence of the new legislation.
There was a clear emotional element in landlord responses. Landlords stated the changes would bring “greater stress”, “anger”, and a feeling of being “powerless.”
Summary
Results showed that while most landlords may be aware of the Renting Homes (Wales) Act, they may not be fully confident in implementing the changes necessary to remain compliant. There is concern that dealing with anti-social tenants and tenants in arrears will be made more difficult as a result of the legislation.
In part, this lack of confidence is a product of what landlords see as a failure of the Welsh Government in offering information, help, and guidance for landlords. Such support is often necessary when major legislative change is introduced.
To maintain the role of the Private Rented Sector as a source of housing in Wales, landlords need to feel confident moving forward. This will ensure a smooth transition with as little disruption as possible to landlords and tenants alike.
