Controls will not result in adequate housing and fair rents for Wales

Without introducing measures that tackle tenant demand and landlord costs, property standards will reduce, landlords will leave the sector and rents will rise. This has been evidenced when rent controls have been implemented across Europe and the United States and is currently the case in Scotland.

Houses in Cardiff, Wales

Propertymark has reiterated our opposition to rent controls in our response to the Green Paper consultation issued by the Welsh Government entitled Securing a path towards adequate housing including fair rents and affordability.

Our view on the consultation

Propertymark supports the concept of making adequate housing a human right in Wales, however, we believe rent controls should have been separated from the debate. We also called for the Welsh Government to learn the harsh lessons from the introduction of a cap on rents through the cost of living legislation in Scotland.

Edinburgh landscape
17 May 2023
Devastating impact cost of living legislation having on the PRS

Defining fair rent

Historically, the term ‘fair rent’ has been used in the context of regulated tenancies which allowed the landlord or tenant to apply to have a fair rent registered, which would usually be set below the market rent. This mechanism was a form of rent control, with subsequent increases limited.

The proposals in the Green Paper are that the definition should be broader and be taken to mean “fair” in the wider context of “equitable”, in that it needs to be fair and affordable to all parties involved (in this case both tenants and landlords).

We urge the Welsh Government to be cautious about introducing a broad definition that effectively acts as a way of introducing rent controls. This would fail to properly consider whether rent controls are needed in Wales in the first place and the variations in circumstances in different areas of the country.

Types of rent controls

The intentions of the Welsh Government will become clearer when they publish their White Paper in the early part of 2024, however the consultation did explore different models of rent control.

Propertymark is not in favour of any rent control regime, and we are especially concerned about the prospect of harsh ‘first generation’ rent freezes as seen in Scotland. We also urge specific caution around linking rent controls to EPC’s which would further penalise landlords, making it harder to fund improvements that would benefit tenants and may force more properties out of the market.

Propertymark will continue to engage with the Welsh Government on this issue through the Minister and during our participation on the Welsh Government stakeholder group.

Read the full consultation response