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| Proposed legislation to make renting simpler and more transparent are outlined in the latest housing white paper from the Welsh Government. (Pic : The Guardian) |
Previous Housing Minister Huw Lewis (Lab, Merthyr Tydfil & Rhymney) launched a separate, but related, white paper in 2012. This is the first in-depth consultation to stem from those proposals.
The need for change
The Law Commission published a report identifying several areas of the rental market that needed reform, which a multitude of organisations and people had asked for over the course of several years.
Many renters aren't satisfied with being owner-occupiers, and are said to have lower life satisfaction compared to home owners. As I'll point out in my next look at the census (probably next week), Wales is increasingly becoming a nation of renters. Around 30% of Welsh households live in rented accommodation.
Renting has advantages, like flexibility when it comes to moving (i.e for work on short notice) and some level of legal security. However, when it comes to social renting, many people see differences between renting from a local authority, from a private social landlord – like a housing association – or from a fully private landlord.
There are currently loads of different types of residential rental tenancies, many of which were created via Westminster legislation to respond to specific problems like anti-social behaviour (Family Intervention Tenancies, Demoted Tenancies etc.). Many tenants don't understand, or just "skim over", their rental contracts due to the confusion.
The Welsh Government can't offer any sort of tax incentives - like those used in Germany and Australia - to promote long-term renting because they don't have the powers. However, then can use the law to simplify arrangements for tenants, and encourage investment in rental properties by "not placing too many barriers".
What are the proposed changes?
The current system of seven types of residential rental contract will be simplified into two :
- A "secure contract", similar to local authority secure tenancies. These are said to have much greater protection for tenants, secured in law. It'll also mean that social housing tenants in the private sector and local authorities will have the same type of contract.
- A "standard contract", similar to short hold tenancies used in the private rental market. This is said to have a lower level of security, but landlords would have the option to create more secure, long-term tenancies if they wish.
What are the other benefits?
- Tackling anti-social behaviour – Conduct clauses will be inserted, as standard, into rental contracts, with tenants made aware of their responsibilities. Breaching the terms could lead to a possession order being issued by the landlord, which could lead to eviction.
- Tackling domestic abuse – The above clause would include domestic violence. There'll be clauses to evict the abuser, without the victim needing to terminate their tenancy (as currently). The Welsh Government are working on a related Domestic Violence Bill, which hasn't been introduced yet. More from me once it is.
- Flexibility in joint tenancies – Instead of joint tenancies ending when one person leaves, the remaining tenant will be able to "give notice" to their landlord, enabling them to have enough time to find a replacement.
- Rights for young renters – People aged 16 and 17 will be given the same power to rent as an 18 y.o. This could be useful for youngsters leaving care, for example.
- Succession rights – Carers of a tenant who dies, and who've lived in the rented home for at least 12 months, will have succession rights to the tenancy.
- No mandatory eviction for serious rent arrears (for housing association tenants) – This effectively removes "Ground 8" from the Housing Act 1988 as a grounds for eviction, granting housing association tenants the same rights as local authority tenants.
- Abolish 6 month moratoriums on evictions – This might prove controversial, but it's said that most contracts are a minimum of 6-12 months anyway. It could make it easier for tenants to look for a short-term rent or to house the homeless.
- Including landlord repair obligations in rental contracts – Self-explanatory. They'll be written into every rental contract, hopefully improving the quality of rental accommodation.
It might look heavily skewed in favour of tenants, but landlords stand to benefit too. The new arrangements will be simplified – reducing administration costs – and provide greater certainty with regard rental terms. There'll also be much better ways to deal with things like sudden abandonment of rented properties, which is said to be a big problem.
Implementing the changes
The Welsh Government intend to introduce a Renting Homes Bill in 2015, becoming law in 2016, so this process still has some way to go. Consultation on the white paper closes on 16th August.
It's decided that existing tenants won't have to sign any new rental contracts straight away as a result of the changes. Instead, they'll be phased in. At the moment though, it's unclear what the measures will cost, and the Rental Landlords Association have claimed that the money used to introduce legislation and regulations could be better spent on expanding housing stock.
All those details will become clearer when the draft Bill is introduced, as said sometime in 2015.
A good set of proposals?
As I'll note shortly in another blog, renting is becoming increasingly important as house prices remain ridiculously high. I would have preferred German-style arrangements for long-term renting, but I accept that's beyond the Assembly's devolved competence, which is a shame. But if the changes work it might not be necessary.
My concern - as with all things housing related - is the law of unintended consequences, where "progressive" changes in Wales could result in English local authorities dumping their problems on our doorstep, instead of pressing Westminster to make these sorts of changes themselves. Hopefully though, this might clamp down on slumlords – and let's face it, they are slumlords - along the North Wales coast in particular and other parts of Wales.
It'll also clamp down on bad tenants. As long as the rules are fair, those changes are fine. But if they break those rules, and are subsequently evicted, there's still the question of where the bad tenants would go? We're not going to go down the road of creating ghettos on isolated estates made up entirely of evicted tenants, are we?
Will 'secure contracts' be available for tenants in the private sector? or are they just for the already relatively privileged social/council sector tenants?
ReplyDeleteWill there be any moves to allocate social housing to ordinary people who want jobs, homes and families or will we retain the perverse system whereby priority is given to the least deserving? released criminals, drug abusers, drunks etc.
Is there anything about reducing and restricting private sector rents to stop landlords charging the inflated 'market rate' and effectively having their tenants paying their buy to let mortgages for them?
I won't even ask if there is any possibility of them extending extending Right to Buy to the private sector, allowing tenants to buy 'their' accommodation with the same discounts and privileges that council housing tenants do. Nothing must be allowed to damage our politicians property portfolios.
Thanks, Anon.
ReplyDeleteIt's said there would be nothing to stop private sector landlords offering secure contracts. Technically, housing associations are in the private sector, they just provide social housing. Sometimes "standard contracts" are used by local and housing authorities too.
Councils and housing associations have their own criteria for allocating housing, and it's usually children that boosts priority.
The trend for dealing with - as you put it, the so-called "least deserving" - has been to place them in semi-secure sheltered housing, in Bridgend anyway. It's better than creating vagrants. The new rules should make it easier to remove them if they cause trouble in rented accommodation. The question - as I said - is where would they go?
There are plenty of "least deserving" who've made successes of themselves in finance, politics and the entertainment industry. And plenty of "most deserving" who are stuck in the gutter.
As for restricting private rents - I doubt the Assembly has that power. It's not their job anyway. It's what happens when you let the housing market run amok.
Everyone has a "right to buy" in the private sector, it's just the market determines the price. There's nothing stopping a private tenant making an offer for their rented house/flat, is there? People rent for a reason too - one being not being able to afford house prices or mortgages in expensive areas in the first place.
"Right to Buy" is flawed anyway because it was supposed to raise money to build new social housing. Epic fail.
Yes private sector landlords will be able to use secure contracts, but there will be no compulsion to, which does nothing to help a tenant who wants secure accomodation if the landlord doesn't want to provide it.
ReplyDeleteAnd I'm sure you realise that a council house tenant who wishes to buy his/her council house is in a far better position than someone in private rented accomodation. for a start the landlord is under no compulsion to sell, and if he/she does they are entitled to demand the market rate with no discounts regardless of how much rent the tenant has paid over the years. To claim that private tenants have a 'right to buy' in the same way that council tenants do is a nonsense.
If a tenant wants secure accommodation, then the private rental market's clearly not for them. Local authorities and housing associations are providing rented housing as part of a guaranteed minimum public service - usually on a not-for-profit basis. Private landlords do it to make money, not out of the kindness of their hearts.
ReplyDeleteAnd yeah, it's fair to say private tenants have a right to buy their flat/house, but it's not an equivalent of the "Right to Buy". And why would/should it be? What private landlord is going to sign up to provide rental accommodation if they were compelled to offer a discount should a tenant decide to make an offer? Like I said, they're in it to make money and profit.
There's nothing stopping a private tenant negotiating a discount, and some landlords might jump at the chance should they need to sell a property quickly (i.e they're in financial trouble).
There are also shared equity schemes, and specific schemes for the private sector that enable a tenant to rent and buy at the same time. Maybe, private tenants should have a right to enter a deal like that.
In the long term, we're going to need cheaper houses and cheaper rents full stop. "Right to Buy" has reduced social housing stocks - which haven't been sufficiently replaced and led to people turning to the private sector in the first place. While "buy to let investors" were the big winner from the Blair-Brown housing boom, not ordinary people.