Local Government and Housing Committee

Let's move on, then, and our second item on our agenda today is our first evidence session with regard to the committee's work on the private rented sector in Wales. I'm very pleased to be joined by four witnesses from the world of academia. Perhaps you might introduce yourselves for the record, perhaps starting with Edith.

Okay, yes. I'm Edith England, Dr Edith England. I'm a senior lecturer in social policy at Cardiff Metropolitan University. I'm also programme director for the housing and the health and social care courses. Yes. I'll pass over.

Thank you.

Josie Henley—Dr Josie Henley. I'm a lecturer in social psychology in Cardiff University, and my research area is neurodivergence and disabilities and how the world affects people with disabilities—the social model of disability, rather than the medical model.

Thank you.

Thanks, Josie. I'm Bob Smith. I'm an honorary researcher in the school of geography and planning at Cardiff University. I also work one day a week for—a bit of a mouthful—the UK Collaborative Centre for Housing Evidence, which I'll refer to as we go along as CaCHE. So, I work a day a week for them as the knowledge exchange broker in relation to Wales. CaCHE is a collaboration of UK universities and others doing research and evidence gathering on housing.

Okay. Thank you.

Good morning, everyone. So, I'm Dr Tom Simcock, research fellow and research manager of the healthy housing initiative at the University of Huddersfield. I'm also a board member and the current secretary of the Housing Studies Association, the learned society for housing research and debate.

Okay. Thank you, Tom. Thank you all very much for coming in to give evidence to the committee this morning. I'll start with some fairly general questions on policy and vision before we bring in other committee members with their questions. So, firstly, then, in your view, does the Welsh Government have a clear vision for the role that the private rented sector should play in Wales in our housing system? Who would like to start us off? Bob.

Yes, I'll happily kick off, and hopefully others will come in and either agree or disagree. If I'm honest, I'm not certain that I'm clear that the Welsh Government does have a clear vision or strategy for housing or the role that the private rented sector might play. I think it's partly the fact that, although we have a national plan for Wales to 2040, I think it's been a long time since we've had an overall strategic vision for housing in Wales. I think the last strategy was 2010, and, before that, the one in 2001, 'Better Homes'. So, I suppose I do worry that things have changed a lot in the last 15 years or so, added to which, as I think I made the point in my opening remarks in my written evidence that—. I think I quoted Christine Whitehead and Kath Scanlon, with their work on the private rented sector in Wales, saying that it had changed significantly, and it's continued to change significantly over the last 25 years. In that sense, without being overly critical of Welsh Government, I think I'd question whether there is an overarching strategy or vision, and one that reflects the changes that have taken place over the last 25 years, when the sector has grown massively, not only in Wales but in other parts of the UK.

Okay, Bob. Thanks very much. Anybody like to add anything? Yes, Edith.

Yes, just to add on to what Bob said. So, my particular areas are around exclusion, marginalised groups and so on, and also pathways between homelessness and the private rented sector and vice versa. What I would say as well is that I do feel that there could be more done around thinking about how the private rented sector affects different groups, segmentation of the sector, what that could look like, in terms of thinking about how different groups might have different needs within the private rented sector and how they might be addressed, or whether it needs a whole-sector approach that accommodates those needs and anticipates those needs.

Also, I think it's really useful to have a strategy for the private rented sector, but that strategy needs to incorporate other considerations—so, for example, people facing domestic abuse—and linking up with those services and how those services are funded and so on.

I see. Okay. Thanks very much, Edith. Anybody else like to add anything?

If I could.

Yes, Tom.

I think that one of the terminologies that is used around the private rented sector—and not just by the Welsh Government, but other Governments as well across the UK—is around a thriving private rented sector. I don't know if that's really defined as to what is meant by a thriving private rented sector. Is that one that's growing, and continues to grow, in size? I think that this will come into our other questions later, around where does that supply comes from, in terms of how does that private rented sector grow. Or is it thriving in terms of rental price increases? Should rents go up every so often, and by how much? So, I think that there is more to be done in terms of defining what a thriving private rented sector looks like, as I think that there is more definition needed within that, in terms of setting out that vision.

Okay, Tom. Thanks very much. Edith, are you—?

To add very, very quickly, and to refer to what Tom is saying as well, I think, when we are talking about thriving, there's a question of thriving for whom, and what that actually means for Wales in the longer term. One of the pieces of research that we've been doing recently is looking at families in the private rented sector, and things like moving, how many times children in the private rented sector are moving within a five-year period. Children in the private rented sector move, on average, five times as many—. Sorry, are five times as likely to move within a five-year period, basically, and that has huge impacts in terms of disruption to school and so on. So, sometimes I feel that that is a bit missing: when we talk about thriving, who is this for? Who is thriving?

If we could develop that, perhaps, just a little bit, Edith, because my next question, really, is—. Having asked does the Welsh Government have a vision for the private rented sector in Wales, the next question, really, is: could you offer some ideas as to what that vision might look like, if it was to be developed or further developed? I think you've started off on that territory, Edith. Anybody like to offer any views on what the vision in Wales for the private rented sector should look like? Do you want to expand a little, Edith, on what you've already said?

Yes, I could, a couple of things.

I'm sure that others will come in then.

Yes. So, I think the first thing I'd say is that, when we're thinking about the private rented sector, we need to be thinking about three main things. We need to think about affordability, security and sustainability. People need somewhere to live over the long term that they can afford and that is of a reasonable quality. The levels of regulation in the private rented sector—. We don't have anything like the level of regulation that we've got in the social housing sector. That means that people in the private rented sector are having less good quality accommodation, put bluntly. So, we need more regulation.

Something that I'd particularly suggest, which I think could work quite well, is leasing schemes, so, schemes where local authorities are paying landlords over a protected period of time, or enabling landlords over a protected period of time to rent properties at the local housing allowance. That gives tenants some security of tenure. It enables the private rented sector to be targeted, in effect. It gives some protection for particular groups who are particularly vulnerable. And I think that would be something that could be expanded and could offer some protection for certain groups.

Can I just come in on that?

Yes, Carolyn, please.

So, there is a scheme at the moment where public landlords can acquire private houses for rent, or they can rent them out, or private landlords can rent them out, at the local housing allowance rate. I guess it's whether or not that's the right amount for the private landlord as well, and whether that's working. I think it's working in some cases. It has increased the sector for the public service sector.

If that is not—. If the LHA is not enough for private landlords, surely we need to raise the LHA, to make that—

Which was my question, my following question: do you think the LHA is enough? I know, reading the evidence earlier, Tom, you also mentioned about universal credit, welfare, as being a barrier as well. The local housing allowance doesn't cover the private or the public rental sector, which has been a bit of an issue. So, I just wondered if there's anything you'd like to expand on that, really.

Yes, in our research as well, we found a particular gap in terms of the local housing allowance for two- and three-bedroomed houses in Wales, so, particularly affecting families. So, I think there are several schemes, I think, effectively, pilot-type schemes at the moment. But it seems to me that that is potentially quite an effective way of expanding. If that scheme was expanded, it would be a way of offering targeted interventions for certain groups who are particularly at risk of, then, homelessness and long-term housing instability.

In that case, what do you think about rent caps? Because there are rental caps, aren't there, in the public sector, so they can only increase once a year, annually, and it's usually fixed at a certain rate—not to go above a certain rate. But that's not the case in the private rental sector. So, just your views on that.

That's the approach across a lot of Europe, Scotland, Ireland. I think that the approach that Scotland takes is that local authorities can apply for local rent caps where there's a particular issue, like pressure on social housing, for example. I think that that seems like a very logical approach, actually, if we're going to be thinking about it from the perspective of protecting people in the private rented sector, and thinking about the long-term needs of the Welsh population, effectively, and young people and so on, then having some kind of control over spiralling rents seems absolutely logical and necessary, and would also reduce the kind of competition that pushes rents up, I think.

Okay. Did you want to come in, Tom?

It's difficult. I think this comes back to where we're talking about the vision of the private rented sector. Who is the private rented sector for? And I think in the terminology in the Welsh Government's policy document on fair rents, it's about the right property, for the right person, at the right time. If we think about, if you're a student, you might want to then live in the private rented sector because it's a temporary, short-term accommodation sector, and then you might then think about other tenures once you've moved into a professional job. So, it's thinking about that life-course approach. And then that also comes into universal credit and the amounts there. Yes, there is a complete issue in terms of the amount of local housing allowance, in terms of not covering the rents that are needed, but should the private rented sector—? Is the purpose of the private rented sector for that, or should there be more social housing being built, which would then alleviate pressures in terms of the housing benefit bill? Research from Shelter and, is it the National Housing Federation, this week found I think that there'd be a substantial benefit in terms of building social housing, in terms of reducing the housing benefit bill. So, there are those elements there.

Chicken and egg.

If I may just follow on from Tom, I think it is important, really, that, although this inquiry is looking at the private rented sector in Wales, we don't see it in isolation. It is part of that wider housing system, if you like, and, where you intervene in one part of the system, you intervene in the private rented sector, it has knock-on effects elsewhere. Likewise, as Tom says, I think that, if you do intervene in the social housing sector, and you increase supply, again, the consequences may be quite significant. And I appreciate that it's very difficult in the current economic climate to be increasing the supply of social housing—I know that's your next inquiry later this year—but I think one does have to see the private rented sector in that wider housing system, and think about the consequences. Again, I come back to, notwithstanding the Welsh Government have had some interesting initiatives like the private leasing scheme, and like the encouragement to bring back into use empty housing in the private rented sector, I think one has to see it in that need for a wider housing strategy and wider housing vision for Wales, and one that reflects the diversity of needs across the country. And, as we said, the private rented sector is a very diverse sector. It's catering for a much wider set of needs than it probably traditionally did, and it is now certainly catering for more low-income vulnerable households than perhaps it did 20 years or so ago—people who perhaps would have looked to social renting and are now being housed in the private rented sector, at least for periods of time.

Yes, okay, Bob. Let me just bring Janet Finch-Saunders in at this point. Janet.

Thank you, Chair. As the shadow Minister for housing, I've done quite some considerable work on all aspects of homelessness and how we actually find homes for people, rather than, at the moment, hotel rooms. Edith, you made a general statement regarding poorer quality housing in the private sector, as opposed to rented social. I think we have to be very careful in the language we use here. Would you not agree with me—it's certainly happened in my constituency and from evidence we've taken, and freedom of information requests and all sorts that we've put in—there are many landlords now leaving the sector because they feel that there's been lots of overburdensome regulations?

I was interested to hear that you feel more regulations are needed in the private sector market. For years, they've provided a niche, and I actually agree with the comments made by Bob Smith that there needs to be this overall strategy, and I'll defy anybody to tell me that the private rented sector is not fulfilling well the need for housing.

So, would you not agree with me, Edith, that, as a result of the overburdensome regulations, it is one of the reasons—? And it certainly happens in Aberconwy—it's a trigger. Once a private landlord serves an eviction notice because they're selling or just getting out of the sector, we then get the aftermath of having to work with housing solutions to try and find somewhere, and they ultimately end up in hotel rooms?

Sorry, I'm not completely sure I understood the question, so I'm just going to try and paraphrase and I hope that—

I think you over-generalised by saying accommodation in the private sector wasn't as good as rented social. So, where's your evidence to suggest that?

I believe that there have been surveys that have shown that the number of category 1 hazards in the private rented sector are higher.

Could we have that evidence, please, sent to us?

I can try, yes, if you want me to. I'm sure I can provide something. But what I would say is that, if I've understood correctly, the premise of the question is that if we regulate private landlords more, people will become homeless. That seems to me to be the wrong way of looking at it. So, if people are being provided with a home, we know how important a decent quality home is. We know how important that is for children. We know that having poor-quality housing during childhood has an impact on the rest of people's lives—research in adverse childhood experiences, and so on. So, I think we're looking at this the wrong way. If increasing regulation to make sure that we've got decent standards of housing for everyone in Wales means that people are no longer prepared to provide that housing, then we need to think about other ways to provide that housing, we need to think about other mechanisms, but I don't think we should be expecting people to put up with less good quality housing because otherwise we won't have the supply.

What I would say as well is with regard to the whole question about housing adequacy, the big thing I'd say is that there isn't really at the moment a straightforward way for tenants to actually address housing issues with their landlords. It is a case of going to the small claims court, it's a case—. I understand that we've now got protections around things like retaliatory eviction, but that's a very difficult process for a tenant to go through, and tenants are in a very much a disempowered position compared to landlords. If we had the same level of regulation over housing quality as we do in the social housing sector—. I don't really understand why we wouldn't, unless we're saying that people in the private rented sector are not entitled to the same level of housing adequacy. If we've decided that this is what an adequate house looks like and that's the basis of creating a set of regulations in the social housing sector, then why would we not also apply that to the private rented sector? Why would that group of Welsh people be entitled to less good quality protection and housing? I don't understand the logic of that.

Just to—

Janet, we're going to come on to these matters in general later in this evidence session, so at this point I'm going to move on to questions from Sam Rowlands. Sam.

Okay.

Thanks, Chair. Good morning, everybody. I really appreciate you joining us this morning. I just want to touch on—it was mentioned in the previous discussions—some of the issues around supply and demand. I'm just wondering what you think the major factors affecting supply and demand are in the private rented sector at the moment.

Who would like to start us off? Tom.

I think that's a really important question for us to think about. I think, at the moment, the key driver of supply and demand is the financial considerations for landlords in terms of base rates, mortgage rates. That is going to be the primary concern—do the finances stack up? They might have bought that property 10 years ago and, with the current base rates, that’s potentially put them in a very difficult position in terms of the finances, and potentially quite a few landlords, especially if their fixed-term rates have come up, may be pushed into a loss, which will then be leading them into leaving the sector. There’s recent work from the Collaborative Centre for Housing Excellence—I think it was for the Department of Levelling Up, Housing and Communities—that identified that non-price regulation had very little impact on supply and demand in private rented sectors. I think that was an international evidence review. So, I think the key thing is the finance and does it stack up for private landlords.

I’ll come on to it probably later as well, when we talk about discrimination in access to the private rented sector, but there are areas where it is financially viable for landlords, and there are other areas, such as the short-term let sector, which is now recovering post pandemic, where landlords were able to claim tax relief that they wouldn’t be able to claim in the private rented sector—specifically what’s called mortgage interest relief or finance interest relief on their mortgages, which you’ve probably heard from different groups as well. Obviously, that reduction in finance interest relief can cause further problems, and that’ll be substantial for those landlords who own property with finance. That’ll be the thing that’ll be driving the supply issues.

But then, as I think I came up earlier, around what is the purpose of the private rented sector, if we had a greater social housing sector, that would then reduce some of the demand for the private rented sector, which would then balance out the issues as well. So, as Bob said, if we see it more broadly and see those levers in different places, it can then affect the private rented sector as a whole as well.

Okay, Tom.

If I could follow on from what Tom said—

Yes.

—I think the other thing is, again, the private rented sector is very diverse in terms of the make-up of the landlords. So, again, I think we need to think about who are the landlords. I'm sure we'll come on later to discuss issues around data and lack of data and lack of quality data, but I think there are real problems about, perhaps, not having a very clear picture about who are private landlords in Wales, what is the mix of landlords between those who are perhaps accidental landlords, who've inherited a property and have let it out for a short term, and are perhaps then thinking of selling it into owner-occupation when the market changes, or those who've had to move for reasons of jobs, perhaps move from Wales to somewhere else and let their house. Once again, I think one needs to think about the differences between the accidental landlords, those small landlords—. I think, in Wales, again the evidence is that most landlords have very limited portfolios—one, two, a handful of properties, where perhaps they're investing with the idea that it might be about generating an income for retirement purposes to supplement the state pension. On the other hand, I guess, you have got the more business oriented, entrepreneurial landlords.

So, again, I think the problem is we don't know enough about the make-up of landlords in Wales, what motivates them, what does influence their decisions to invest or disinvest from the sector, which makes it quite a difficult sector to regulate in that sense. It's very different, I think, from the social rented sector, where you're talking about regulating 35 housing associations and 22 local authorities, only half of whom have a landlord function. It's a complex sector.

Yes, okay.

Could I perhaps, before other witnesses contribute on this, just ask a straightforward question on the supply and demand issue? There was reference made earlier to where the power lies in terms of that relationship between tenant and landlord. I suspect that, if there is an undersupply and over-demand, then there is more power sitting with landlords than there is with tenants. Would this problem just be fixed if more houses were being built, or is that far too simplistic?

I think that would obviously be a good idea. I think probably no-one involved in housing would disagree with you on that. I do think there are some nuances here, and I just want to come back on those. One of the big things I actually want to highlight is social housing. My work's been with different groups, including LGBTQ people, for example. What private rented sector housing can offer—nuances—is it can offer things that standard social rented housing is not offering. It can offer flexibility around who's living in the property, for example, for things like chosen families, families of choice, found families. It can offer more choice of location and so on. So, I think there is a role for the private rented sector in terms of meeting the needs of some groups. If we're going to look at increasing the social housing stock, which of course we should, we do need to think about what that actually looks like and, if we're just taking the model we've got at the moment for house building—how many rooms a house has got and who we expect to live in those houses—and transferring that into a greater scale, whether that's actually going to meet the needs of people in Wales at the moment.

The other thing I also wanted to mention around supply is that I do think there's a significant issue in terms of the private rented sector in terms of families and rent affordability, and that's because, obviously, families tend to have a lower proportion of income to people in the property, which means it's harder for them to compete with, for example, groups of students and so on who can offer higher rents. So, I think there needs to be something done around that. The local housing allowance only goes up to four bedrooms at a maximum, for example, so one thing that could be done quite simply is to consider ways to be more flexible about that and consider ways to increase it to five bedrooms or to allow discretionary larger properties to people and so on.

Okay, Edith. Thanks very much. Sam.

Thanks, Chair. Thanks for those responses, I didn't mean to make things far too simplistic; I'm just trying to get to the nub of some of these issues. I think Bob mentioned a moment ago the different types of landlords we have in terms of scale—some with perhaps one or two properties, and others with 20 plus properties as a major enterprise. Do you have any views on whether the mix at the moment is about right in terms of the types of landlords, as in the size of their portfolios, and what would be a good mix, do you think, of those types of landlords? Is there an answer to that question, or is it just the way it is?

Let me have a go at addressing that question. I think it is a very challenging question. I personally find it very difficult to think what is the right balance of landlords within the private rented sector. I tend to take the view that, in terms of meeting housing need—and others have made the comment—perhaps increasing the supply in the social rented sector would lower demand for housing in the private rented sector, particularly from families and low-income households.

I think in terms of what the sector might look like, there probably is an argument—and again, I come back to the fact that I don't think we know enough about what the make-up of the private rented sector is in Wales and what the make-up of landlords is—for asking whether there are ways of attracting more larger scale investment, more business orientated organisations to invest in the private rented sector in Wales who would be doing it for commercial reasons. Again, we've had, over the decades, Government initiatives, certainly Westminster Government initiatives. I go back to things like the business expansion scheme, I think, back in the 1990s, when tax breaks were made available for investors in private renting, and maybe that is something we could think about. I think that's probably more for the UK Government than it is for the devolved administrations in Wales and Scotland.

Sam, did you want to ask anything further?

Yes, if I may, and, obviously, if anybody else wants to come back further on that issue around the mix and the scale of those landlords. Finally on this issue, are there any particular Government interventions—? Bob just mentioned an example of one there at a UK level. But is there anything from a Welsh Government point of view that you think may help to balance out supply and demand? I guess I'm thinking of the supply side a bit more at this stage, but demand, certainly, as well. Are there any particular interventions that aren't being considered that could be?

Would anybody like to offer any ideas on that? Tom.

I think, just going back to the previous point on the types of landlords, there are different benefits and cons to the different types as well. So, I think it's about making sure there is that mix. Because if there are landlords who are maybe renting out property for the short term, if they've moved away somewhere else but are intending to come back, that's then going to add churn into the sector as well. So, as I said, it's thinking about the right property for the right person at the right time. If that person who then rents that property is a family who want to stay there for a long period of time, it's not the right property for them in terms of the landlord's plans. So, I think it's making sure that there's a good mix of different types of landlords within there. But then, also, there is the build-to-rent sector, and if you look at the experiences in America that are happening now where certain build-to-rent sector landlords are disinvesting or trying to raise rents across big blocks of their portfolio, that can cause problems as well in terms of affordability and long-term security for households.

Thinking about the supply side of how we could incentivise landlords coming in to the sector, I think one of the key things would be looking at tax incentives, possibly around stamp duty or land transaction tax, because there are the higher rates for landlords. The only concern is that if you remove any higher rates of tax for additional properties, where do those properties come from? Is it from the existing housing stock, and so it's landlords then competing against existing households or people who are looking to own their own home, or is it for new-build properties where those houses are being specifically built for the private rented sector? I think there's a nuance there that's not really articulated in some of the arguments around improving supply in the private rented sector around where do those properties come from. Because building a house isn't a five-minute job; it is a long, drawn-out process through planning and the actual construction process. And thinking about how we can boost that supply and then get those properties into the private rented sector, that joined-up thinking there in terms of the incentives would be very helpful.

Thanks, Tom. Okay, Sam? Yes. Carolyn Thomas.

My question is about barriers, diversity and discrimination. You've already mentioned diversity in the sector, different categories of tenants and landlords. Would you like to expand a bit further on that?

I suppose this is my area, really. I've been listening to the things that everybody has been saying about the sector, about the supply and demand and about the mix of the types of tenants, the types of landlords, and one of the things that I think is often missed is that, often, when people talk about who's living in the private rented sector, it's framed in terms of choice. Very much there are some people who choose to live in the private rented sector because it's very convenient for them—they're students, people in the kinds of jobs where you're going to move around a lot and you don't want to have a permanent base—but I would speculate, if the data was there, that the majority of people living in the private rented sector actually don't really want to live there, would rather actually not be living in the private rented sector and would rather have a lot more security in their tenure, would rather have a lot more of a long-term solution. They just can't afford to move out, so they're kind of stuck, or whatever circumstances are against them.

My area, really, is disabled people and what's happening with disabled people. One of the things about social housing is it's often built in an estate and it's separate from the main city centre or wherever somebody is living, and so people who have disabilities, who have a need for access to facilities and transport and suchlike, are going to potentially be better off within the city centre areas than they would be out in some estate somewhere. On top of that, people who are registered as having a disability and have a piece of paper that says, 'These are my access needs' et cetera might meet the very high threshold that there is for support and for getting a place in social housing, or be on the waiting list, but that's just the tip of the iceberg; there's going to be quite a vast number of people who either don't meet that very high threshold or haven't yet got a diagnosis, haven't yet got assessed, haven't got their piece of paper that says, 'This is what my access needs are', and there's going to be people who gradually slide into disability. I've also done research with cognitive decline, and there's a lot of underdiagnosis in terms of dementia. So, you're going to have people who've been in their tenancy perfectly coping well, and then it starts to disintegrate. And if that's not picked up somehow, then they're just going to be evicted from a landlord, who's only really interested in profit. That's the hard edge of it. So, those are the areas of discrimination that I look at.

I know that, in terms of marginalisations, all the groups who are known to be marginalised tend to be on lower incomes, and the people on lower incomes tend to be in the private rented sector, because that's all that's available for them. I think that others, probably Edith, could speak more to other marginalisations; my area is disabilities. I've got a number of different ideas for what kind of interventions, what kind of support, would need to be in place. It all requires funding, and I know that funding is very lacking with things like tenancy support.

I'd like to hear those. What would your vision be?

The way that I see tenancy support is that it only tends to be offered at the very last minute, if at all. People have to have fallen quite far into arrears, they have to be facing eviction, before they actually get the tenancy support. That means that there's no safety net. And that's true for anybody, not just people with disabilities. But I think that people with disabilities are at the very hard edge of that, because they're much more likely, in many ways, to be falling into the issues. It's not just about financial things. They might be able to actually afford to pay the rent, but, for whatever reason, the system is set up and they can't negotiate it. I'm thinking about autistic people: it's known that autistic people find it difficult to make phone calls, to understand things that aren't spelled out to them. You've got a form to fill in, you don't understand the question, because it's said in a very vague way, so you either put the wrong information down or you don't manage to fill the form in. If you've got to report a repair, there's something gone wrong with your house and you need to report a repair, and the only way that you can report that repair is to go on the internet and negotiate this portal, where you have to tick is it your boiler or is it your plumbing. It's that kind of support that's needed, because if people don't manage to do those things then they're going to be getting into trouble with their landlords.

I've got a list here from the evidence: 37 per cent prefer not to rent to benefit claimants, getting a UK-based guarantor is difficult, accessible homes adapted for disabled people, and no-pet policies. So, all these are things that you would—.

And that's another thing; autistic people often have a pet. It's seen as a pet, but they'll often have companion animals or—. What are they called now?

Is it assistance animals?

Assistance animals. And so, if somebody has an assistance animal and the landlord says, 'No pets', that's quite a barrier. It's more than a pet, that assistance animal.

Is there a register so that if somebody has a disability they can register that they've got a disability and need their pet?

I don't know whether there is a register for that.

So that they can say, 'I've got a certificate, I need this pet because of my disability'. Will that help them get that private rental property? I'll have to find out. I'll do some research.

Again, the issue is the underdiagnosis. There are going to be people who have whatever condition it is that is going to impact on how they manage their tenancy, but they've not got a diagnosis. There's a vicious circle in terms of conditions that have executive function problems. Cognitive decline is one, towards dementia, but also autism, attention deficit hyperactivity disorder. To actually get a diagnosis for those things requires huge high-level management of administration, and unless you've got a support network around you who can take you through that process—. And there's a huge waiting list as well. There will be people who are just coping because that's all they can do, and those are the people that I'm worried about in the private rented sector with no support. Is there anything more you want to say about the marginalisation there? I think I've exhausted disability.

There are only two things that I wanted to add, and I think these were in our evidence, actually. One is around financial barriers for people who have experienced domestic abuse. Financial control is very, very often part of that, and that can translate into things like rent arrears. It can also translate into things like anti-social behaviour orders and so on, and that can hinder someone from getting a property. If someone goes through the homelessness route, there are ways to address that, but if they don't, then it becomes a lot more complicated. One of the things that I think would really help, actually, is if there was a way to extend the kinds of help available to someone who makes a homelessness application to anyone who's experienced abuse and who's got difficulties with passing a credit check and so on, because of that or that can be related back to that—so, something that provides some protection there.

The other thing I would just highlight is that, because of how the private rented sector works—. So, when I was doing research with LGBTQ people, people are fairly sure that they've experienced discrimination when they go to try and rent a property, or properties are not—. They're trying to rent a property and they've got maybe three adults who are trying to rent a property together, because that's what their family looks like. But there's no way for that to be challenged, really, unless there's clear evidence of abuse—not 'abuse', sorry—unless there's clear evidence of discrimination. I don't really know what the solution is to that, but it's just to highlight that it's very—. There's a whole layer here of discrimination, I think, that can occur without really having any way to prevent it from happening, and that makes it harder for people in certain groups, I think, to access the private rented sector.

Okay, Carolyn?

Yes. Is it difficult for people—? If there are three people who want to rent together, is that then classed as a house of multiple occupation?

Yes. So, I think—. Well, this is what I've understood, that, yes, in that situation—

Because that can be a barrier as well, can't it?

Yes. There are ways that they can be seen as—. There are ways around it, like declaring a family relationship, and stuff, but it—

If they were part of a support network of three or four people who needed to be together, it might be classed as a house of multiple occupation if they're not part of the same family. I just wondered if that is something—. Is it something? Is it a barrier?

I think so, and I think it might be partly about—. There might be ways around this already, but I think there's also just a lack of knowledge, probably, among letting agents and so on, that there are, perhaps, workarounds.

Okay.

Okay, Carolyn?

Thank you. Yes.

Jayne Bryant. Jayne.

Diolch, Cadeirydd. Good morning, everybody. I'm going to come on to a topic that we have touched on in a number of questions, really, already, around regulation. Again, as I say, you've mentioned it a little bit this morning, but how coherent is the current overall approach to regulation of the private rented sector?

Everybody's looking at you, Tom.

Yes. I think we've heard that it—. Yes, go on.

I think it all depends on how you mean 'the regulation of the private rented sector.' Do you mean the regulation of property standards and then enforcement of the health and safety rating system? Or is it the regulation of rents, or is it the regulation of security of tenure? I think it's so complex in terms of the regulation of private renting that I think it's also a lot for landlords to keep up with in terms of what are their responsibilities in the private rented sector. And so, I think there is need for more knowledge going into the sector, especially for those who, maybe, are accidental landlords, to understand what that regulation is. At the moment, there's been the Renting Homes (Wales) Act 2016, which has changed the provisions of security of tenure, and the regulations around the contract, now, instead of the tenancy. So, I think, yes, it's complex and there's a lot going on.

Okay, Tom. Bob.

Following on, I entirely agree with Tom's comments about the regulation of the private rented sector. It is complex; there are many different aspects to it. Tom referred to some work that CaCHE did recently for the Department for Levelling Up, Housing and Communities on non-financial regulation. And I think that that report, which was a desk-based piece of research, indicated that there was limited evidence to suggest that non-financial regulation interventions had a major impact on the decisions of private landlords. Obviously, there's a different issue, I suppose, in terms of issues around rent control and rent regulation, and, again, I think since the time that I submitted the evidence to this committee, the very small piece of work that CaCHE did for Welsh Government that was published at the same time as the Green Paper, last summer, was it, I think has looked at the different ways that rent regulation, financial regulation, might be applied in Wales. Again, I think (a) it's a very contentious issue, (b) there are different ways it could be applied, whether it be—. I think that paper talked about different generations of rent control, from a hard-stop freeze on rents through to more rent-stabilisation policies and rent resets when tenancies changed. Obviously, it's something that, I think, Welsh Government will continue to look at. I haven't yet seen the analysis of the responses to the Green Paper consultation, which I guess will be coming out in due course, but it is, potentially, a contentious issue.

I'd also make the point that we made in our paper for Welsh Government that it's not necessarily a cheap option, because, again, if you're going to apply any form of rent control, and I don't think it will be a standardised form of rent control across the entire sector, then you need to make sure that you've got—. I come back to the issue about the data and the evidence to make sure that you can actually measure the outcomes that any such policy would have, even to a local level. So, again, I think a lot of care would need to be taken if that were to be the approach in Wales at a local level to monitor and evaluate to make sure that there weren't unintended consequences, I suppose.

Just on that point, and I don't know if there's anything you'd like to expand on on that, or if anybody else on the panel would, about those arguments for and against the regulation of rents and do you have a view on what the Welsh Government should do.

I personally don't think I have a view as to what the Welsh Government should do. As I say, I think other than that I'm aware that it was in the manifestos both, I think, for Welsh Labour and for Plaid Cymru at the last Senedd elections back in 2021 to look at this issue, as I say, I think it does need to be looked at very carefully. Again, I come back to the fact that you can't see it in isolation from other factors that may be influencing the decisions of landlords. I think it would be very difficult. My view is, if anything was pursued, it would need to be, initially at least, at a very small local scale and then need be very closely monitored to see what the impact would be.

I think it would be good to see some pilot studies of that kind of thing, like Edith mentioned in Scotland, the—. What were they called?

Pressure zones.

The pressure zones in Scotland. If there is a particular area where the rents have just been shooting up over the past few years, that could be an area where it could be piloted.

I see—. Jayne.

Diolch, Chair. Do you have a view about what would be the best way to balance out regulation and supply?

I think I spoke earlier about this, so I'm kind of saying again what I said earlier, but I think there's a broader underlying question there, which is: what are we trying to achieve? What are we trying to supply? Are we trying to supply houses at any cost, or are we trying to supply houses that are fit for people to live in and that people can thrive in? I do think it's worth remembering the 1977 Act, the homelessness Act, was introduced because of that imbalance between quality of housing and price of housing, and the recognition that groups of people, particularly children, were growing up in very poor-quality housing, because that was all that they could afford. So, I think, in terms of the balance between supply and regulation, I feel that there's another question there, which is: what are we supplying and what do we consider to be adequate in terms of supply? What are we trying to achieve more generally?

Okay, Jayne?

Yes. Diolch, Gadeirydd.

Yes, okay. Oh, sorry, Tom. Tom.

Yes, I just wanted to expand on that and just come back to the rent control element, also thinking about at what level those rent controls would be put in place. If you look at other sectors that have similar price controls, such as the higher education sector, with caps on student fees, that has meant, over the last five or six years, that, while costs have increased for universities, they're not able to bring in the same amount of income. If you then put that into the private rented sector system, as landlords' costs increase, if it's the first generation where it's a fixed price, they're going to be then losing money as well in terms of that, and then they're going to seek to leave the sector. So, it's being very targeted, but then that comes back to that we need that data on where are the rent increases, are there areas of local concern where there might be intervention needed, but also then what can be done to help the landlord if there are other interventions, such as bringing in more supply of properties.

Then there's also—. I just wanted to come back to around the discrimination Act, around—. You mentioned about pets, and there are regulations currently being considered in England through the Renters (Reform) Bill in terms of allowing renters to have pets, so landlords won't be unreasonably able to refuse a pet, and also bringing in allowing landlords to charge for or enable the renter to have pet-damage insurance. Work that should be published next week—which I'll share with the committee—that's been commissioned by Battersea Dogs and Cats Home shows that private landlords don't have much to worry about in terms of pet damage; where damage does happen, it's infrequent, it's mild in nature, and it's covered by the landlord as well.

So, when I'm talking about this, I think there are a lot of perceptions by landlords that regulation and things can lead to bad things, but it's perception of risk, not actual occurrence of risk, if that makes sense. So, with the rent control over regulation debates, what actual levels of risk does that have on the landlord? And I think that should be kept in mind as well, that there might be quite angry voices, but does that actually lead to an impact on the landlord or not? And that's the real key, because I think there's always that knee-jerk reaction, 'Oh, this is going to be a terrible thing,' but does it actually lead to a terrible thing or not? And I think currently Zoopla say that 7 per cent of adverts are rated as pet-friendly, but, in reality, landlords can make—. We've done a cost-benefit analysis and landlords can make more money in terms of renting to pet owners, because they offer longer tenancies, because they want to stay there for longer, and there are lower maintenance issues and less administrative work because of that longer tenancy. So, it's very complex, thinking about that landlord-tenant relationship and how the regulation can affect them as well.

Okay, Tom, thanks very much. I'll bring in Janet Finch-Saunders at this point, and, Janet, you've got the last question on data as well. Janet.

[Inaudible.]

Janet, we're not able to hear you. Well, we're not able to decipher; we can hear you speaking, but we can't make out what you are saying. Is there anything you can do to address that?

It seems like a bad connection there, Chair.

Yes.

I appreciate Janet may be trying to fix that. Perhaps—. I've got a question I was going to ask anyway.

Go on, Sam, yes.

Yes. It was just on the issue of regulation and I was just reflecting on the Renting Homes (Wales) Act 2016. I know a number of witnesses have called for further regulation in a number of areas. It doesn't seem as though the regulation that was brought in in 2016 and came into force properly more recently—. It obviously hasn't fixed all the problems out there, and maybe it wasn't necessarily designed to fix all the problems out there. Are there any reflections on that Act in particular? Was it bad regulation and therefore that's why it hasn't done perhaps what people may have wanted it to do? And if you are calling for more regulation, have the lessons been learnt from the implementation of the Act that came in 2016?

Something just very practical that came out of our research actually is, that, if you're going to have regulation, you need to have a way to enforce regulations, and, certainly, the people we spoke to did not understand how to go about enforcing: taking action against landlords; people who are experiencing homelessness challenging decisions and so on. And I think this is across the whole, really, of the housing system in Wales, that we don't have a robust system of administrative justice. If you look at Scotland, for example, they've got first-tier tribunals that can hear cases and that can mediate to an extent in cases around rising rents, disrepair, landlords entering properties and so on. I really think that having something like that would be really, really beneficial in Wales, because I think that is one of the reasons why it’s hard to enforce even the regulations that we’ve got, because they need to come from—. Particularly in the private rented sector, you’re looking at quite an individualised relationship often between an individual and a landlord, and if you haven’t got a way of making sure that people are realising their rights, it’s quite hard to see how it’s going to work. Going to the small claims court or something is difficult, it’s challenging, it requires a level of knowledge and awareness that not everyone has got, and time and so on. So, I think that would be my big recommendation about regulation—that there needs to be a way to enforce that regulation that is accessible to people. I’m going to leave it there.

I'd like to expand on that. In the work that we did for the Joseph Rowntree Foundation and the Scottish Government two years ago, one recommendation was about shifting from a culture of enforcement, where action must be taken against a landlord or the tenant has to raise a complaint, to a culture of compliance, where the duty is on the landlord to demonstrate that they’re delivering good-quality housing. It’s not then the tenant who has to go through that system; the burden is on the landlord. That hopefully would address any of those power imbalances. That landlord controls that house; so, they could sell it, they could evict, and the tenant then has to try and find a different property in which to live. So, I think there is that power imbalance there, and shifting from a culture of enforcement, and getting the tenant to have to raise the complaint, to compliance from the landlord is, I think, really key and is a key consideration for legislation going forward.

Let me just ask the final question then, as I'm afraid Janet Finch-Saunders is—

I'm fine. [Laughter.]

Do you want to ask the last question on data, Janet?

Yes, but I want to just come back on the other one regarding rent caps. You can hear me now all right, yes?

Yes, thank you.

Thank you. Regarding rent caps, have any of the witnesses read the report from Scotland where it's proven that the rent caps or rent controls haven't worked? They've succeeded in pushing the rents up now considerably, because the model hasn't worked. Are there any comments from the witnesses on that? Then I'll ask my data question.

Would anybody like to offer a view on the experience in Scotland?

Have they seen the report? You've not seen it, have you? I would just suggest it may be worth—

We can certainly, through our committee researchers, look at the experience in Scotland, Janet. Do you want to go on to your data question?

Yes. All of your written evidence suggests that there is just a lack of data. Indeed, in scrutinising the Minister, she herself has said that we just don't have this data. How do you think that the Welsh Government should be better at improving their data collection? They have no idea, really, how many properties are in the private rented sector and there's a lot of information that's needed. We've often said that we felt that this is a very good area where Rent Smart Wales could be doing more work. Would you agree with me on that—that this data is vitally important, it must be collected, and that Rent Smart Wales could actually play a part in this? Because, after all, they register the majority of private landlords.

I think we've all made the point that there's a lot of dissatisfaction with the quality and the amount of data that we have about the private rented sector in Wales, given that it is now housing something like 17 per cent of households and it has grown very significantly over the last 20-odd years.

I think there are two points. One is that I think Wales is lagging behind other parts of the UK in terms of the data that it has about the private rented sector. A number of members of the committee were at the launch of the National Residential Landlords Association Cymru report on the state of the private rented sector in Wales last June, as I recall. I know that they've been strongly arguing the case for Wales having some sort of equivalent of the English housing survey. As I recall, at that event, the Minister did say that they were exploring the business case, and I assume they're probably still exploring the business case. I haven't heard any announcement on that. So, I think one is the question as to whether we do need to be gathering on a more regular basis more information about landlords and tenants in Wales to get a much better picture.

On your specific point about Rent Smart Wales, yes, I do agree. I think I've probably been critical in the past of Rent Smart Wales. I think progress is being made. And again, if you look at the data dashboard now on the Rent Smart Wales website, we are seeing an improvement in the availability of information. If I'm honest, I would like to see much more made of the administrative data that is collected. And that's not to say that that necessarily has to be done by Rent Smart Wales themselves, as I appreciate there'll be resource issues for Rent Smart Wales. But I think there probably is a case for, perhaps, a partnership between Rent Smart Wales, the Welsh Government and, dare I suggest, the higher education sector, where looking at the administrative data would give us a better picture of what's happening. So, yes, I do agree that more could be done.

As I said, I think Rent Smart Wales have made some progress. There are still problems, I think, with some of the data, because although you're required to register, I don't think you're required to deregister, except after three years or five years. So, there are issues about the quality, but I think we could be looking, in Wales, to do more with the data that is collected, as well as looking to improve the data we have through more periodic surveys.

Thank you. I would absolutely amplify what Bob said there about having something like the English housing survey. As a researcher, it's quite frustrating, because we've actually got some quite high-quality data about things like condition of properties, tenure and so on, but it's only for England, and we need that for Wales. It's becoming really apparent that that would be really helpful.

In terms of Rent Smart Wales, one of the beauties, really, of the English household survey is that it's independent. In theory, although there are obviously issues with sampling, it covers everyone who lives in every form of tenure in England. With Rent Smart Wales, my concern would be that Rent Smart Wales, effectively, deals with people who are registered, who have actually taken that step and they've got a licence, and so on. We need to know what's going on in properties that are not licensed and that do not fall within Rent Smart Wales. So, although I think having them as partners would be really, really helpful, I think certainly, as Bob said, having the academic sector on board would be really, really good. But we do, I think, need to recognise that a lot of issues in the private rented sector are occurring because of a lack of compliance, because of landlords who perhaps are not registered, and we need to find a way of capturing what is going on for those tenancies.

That evidence is supported, what you've just said there, Edith, because when we get complaints into my office—it could be damp, condensation, et cetera—nine times out of 10 the landlords are not registered, and that is so frustrating, hence why I'm quite fiercely protective of good private sector landlords who are registered and play everything by the book. They get the bad name for the ones who are out there and are not registered. So, you've addressed that point. Thank you.

Could I add something else about data? This is just an opportunity to make a plea around data. One of my main areas of research is homelessness and also thinking about flows between homelessness and the private rented sector, and that is a distinct issue. But we don't have data on this, and it would be really, really helpful to have that data. For example, StatsWales has got information on why people have become homeless, but it only goes up to 2018-19. So, we're no longer publishing that data. If we were to introduce an equivalent to the English household survey in Wales, that could include questions around whether households had experienced homelessness. I think it would be so helpful to have that information, and it would really help in terms of understanding need, understanding the population as a whole in terms of their housing needs. So, that's just a request.

Thank you all very much indeed for coming in to give evidence to committee this morning. You will be sent a transcript to check for factual accuracy in the usual way. Diolch yn fawr. Thank you. Committee will break for roughly 10 minutes and resume at 10:35. Thank you.

We come to our second evidence session on the private rented sector in Wales. I'm very pleased to welcome, joining us in person, Bethan Jones, operational manager for Rent Smart Wales, and Henry Dawson, lecturer in housing and health at Cardiff Metropolitan University and a member of the housing expert panel. And joining us virtually is Jim McKirdle, housing policy officer with the Welsh Local Government Association. Thank you all for joining committee today to give evidence on these important matters. Perhaps I might begin with some initial questions around policy and vision. Firstly, does the Welsh Government, in your view, have a clear vision for the role that the private rented sector in Wales should play? Who would like to offer an opinion on that?

Shall we work on the basis that Jim goes first, as he's virtual? Is that okay, Jim?

Jim, are you okay with that? Are you happy to lead on this particular question?

I am, on this particular question, Chair. I think that the direction of travel is clear in terms of the Welsh Government's intention around the private rented sector. Over the past few years, we've some measures that the councils are generally supportive of in terms of improvement of tenant protection, an increased degree of regulation of the private rented sector, and I think, most importantly, a notion of partnership working with landlords in the private rented sector in order to support improvement. So, 'doing with' rather than 'doing to' is certainly the operational way that councils seem to more successfully work with the private rented sector in order to bring about improvement. I think there's a very clear and positive role for the private rented sector in meeting housing need. It makes up a considerable part of the housing supply in Wales, and that's grown over the years, so it is a really important option for people seeking a home in Wales in a different location or moving due to changed circumstances or whatever. It forms a very important part of the landscape around housing choice and housing options in Wales.

Thanks, Jim. Would anybody like to add to that, Henry or Bethan?

I completely agree with Jim that the changes that have been made recently have really helped to increase security of tenure, maybe improvements around property condition and that kind of thing. I think the Welsh Government's vision about what's expected is clear in the private rented sector, so that's fantastic. There's a little bit of uncertainty for me about the role that the private rented sector plays for vulnerable people. A lot of vulnerable people now are housed in the private rented sector, and I sometimes wonder whether that's the right place for them. If it is, then I'd argue that we need better support packages and collaboration to assist landlords to manage those tenancies well.

Coming off the back of that with regard to these tenancies, if we are going to use the private rented sector as a long-term accommodation solution for people in that position—. We've seen services from charitable organisations, from third sector organisations or from public sector branches of local government to support these client groups reduce due to progressive reductions in funding. That has left landlords in a position where they're having to sort of take up the slack there if they want to keep those sorts of tenants. Some landlords are willing to exhibit some level of forbearance and continue with the provision of that sort of role, but, at the moment, I would say, if something gives a reluctance for landlords to provide accommodation for people in those positions, then certainly it's the added concern of having to deal with the tenant's issues over claiming benefit support, or, if they've got a more chaotic lifestyle, managing some of that themselves, or managing aspects of the tenant's behaviour—medication for instance, or disabilities.

And so one thing that I think would particularly help in this area would be bringing together the ability to use disabled facilities grants and the private rented sector, because, at the moment, disabled facilities grants depend on the landlord's consent to having large changes made to the property, which then makes it very difficult to relet. And, at the moment, if we're going to be housing disabled tenants with physical disabilities in the sector, and we want adaptations to be made to those properties, that's quite a big ask of landlords, and so maybe there's more that we can do to support them in that position.

In general, I agree completely with the comments made previously with regards to the tenants' perspective of the sector. It's very clear that there's been a pathway towards greater tenant rights and better protections for tenants with the activities of Rent Smart Wales, and generally a very pro-tenant and supportive position being taken by Welsh Government. And so, I think that's something that's very good to see.

Okay. Is there anything beyond what has already been said that any of you think Welsh Government ought to be doing in terms of having a vision for the private rented sector in Wales? Is there anything in particular you'd highlight, anything that's missing, anything that would improve on the position here, in terms of that vision?

I think it may be a position—a stated position—on the value that the private rented sector has for Welsh Government. What I hear often from landlords is that Welsh Government would prefer the rented sector not to exist. But I think there is a definite role for a certain part of the community in Wales, for them to be living in private rented accommodation. It's just whether it's gone too far. So, I think some clarity around what we want the private rented sector to be going forward would be helpful.

Okay. Does anybody—

Can I have a quick question on that, Chair?

Yes.

Just on that point. Thank you for the response, Bethan. On the point around going too far, what do you mean by that? Is that the number of rental properties, or the role of landlords? What is it that's gone too far, sorry?

I think it's the reliance on the private rented sector to house very vulnerable people. I was up in north Wales last week in an estate in Pensarn, which some Members may be familiar with, and what you have there is an intense development of mainly privately rented accommodation with very deprived people living in those blocks. Now, that's a challenge for any landlord to manage, but particularly so in the private rented sector. It would seem to me that the social sector would be a better solution for that kind of position.

Is that because of the support that they might have, then, in the—? So, that's the support that was discussed earlier, really. Is that why?

Yes, that is one option. We are where we are. Ideally, you could be looking at, maybe, leasing schemes, which may be an option for that kind of area-based issue now, and negotiations with the landlords to transfer properties over to a social landlord. That's an option. Otherwise, it's about putting in a network of support in place that is known to be available to both the landlord and the tenant. My understanding is that, in the main, at the moment, tenants are the ones that access these services, but, sometimes, they're not in a position to ask. So, it's about making sure that the landlords can direct and signpost and access the support on behalf of their tenants sometimes.

The social housing providers, they're operating in an environment where they're very well set up to support client groups, with over 56 per cent of their tenants having one or more long-term illness or disability, meaning that they've already got themselves very well plumbed in with those systems and processes, and they're also a lot more tolerant of some of the difficulties presented by client groups with fluctuating incomes or maybe issues with lifestyle, or a variety of personal problems in addition to health issues.

So, a private landlord, fundamentally, is running a business, and they've got a very small profit margin. The majority of landlords have one to four properties in their portfolios as a second income. So, you're asking somebody who's running a business, and ultimately doesn't have huge profit margins in that business, to go through an awful lot of difficulty in handling some of these client groups. And so they don't have the capacity, the slack, in their business structure to be able to manage some of those problems, and so if a tenant doesn't pay the rent for a number of months because of their income, or they've got a delay in getting hold of some income support, or they're between jobs, then that can be something that's very difficult for the landlord to manage. So, their only resort is to evict. So, social housing landlords are just much better geared up to deal with these client groups.

Okay, thanks for that. From a different angle, would any of you like to point to an area where the private sector might make a bigger contribution in terms of meeting housing need—generally, or in terms of any specific aspect of things we need? Does anybody see a bigger role for the private rented sector, or not?

May I make a start on this one?

Yes, go on.

So, increasingly, we're seeing a proportion of people in the private rented sector who are not in a sufficiently difficult situation to access social rented accommodation, but aren't sufficiently affluent to afford owner-occupier accommodation. So, for that particular client group in the private rented sector, they're perhaps what we typically term as 'generation rent', so they're trapped in that sector in perpetuity. I think, if we're looking at it in a policy and a strategic way, then, considering how we manage the private rented sector, at the moment it's very much set up for people to use as a shorter term and more mobile accommodation solution, maybe between, if it's required—. It's always going to be required for people taking on employment in an area, and it provides that freedom to move closer to alternative employers, if you do want to change roles. But, as we're seeing people now getting older in the private rented sector, we've got a greater proportion of people with children in the private rented sector, then, even with the improved security of tenure that we see through the changes of contract they've brought in in Wales, that still remains a temporary tenure for them, and there's always the ability of the landlord to end their tenancy. And so, I think, if we're looking at this in a strategic sense, then we need to make sure that the sector better provides for people that are in that position.

And something else, which I'm not sure has been entirely considered with regard to the function of the sector—it's sort of longer term—is we're seeing the front end of generation rent who are going to be eventually moving into retirement, and, at the moment, retirement systems are predicated on the idea that you're either paying a low rent in social rented accommodation or that you're an owner occupier who's paid off their mortgage. And yet we've got people that are going to be paying commercial rates of rent of over £1,000 for their house, and they're going to be forced to take that out of their pension, and the question is whether the existing pension solutions are able to tolerate that level of requirement of income, because, at the moment, most of the systems that I'm familiar with are not able to tolerate that level of income, which then leaves us with a bit of long-running time bomb for the Government to deal with, because, ultimately, they'll all end up having to fall back on the state for some support with their rent.

That's very useful, thank you very much.

I think Jim wants to come in.

Sorry, Jim.

Chair, taking a slightly shorter term view than Henry's just set out, I think we need to recognise the fact that we need a contribution to meeting housing need from all sectors in the Welsh housing supply field, and that includes the private rented sector. We've got more than 11,500 homeless people in emergency temporary accommodation at the moment, and I think that, as much as the focus is on developing more social housing and supporting the long-term development of increased numbers of social homes, in the short term, the private rented sector is going to be a real option for many of those people who are in emergency temporary accommodation. So, we need to support the private rented sector to be able to meet those housing needs in all sorts of communities across Wales, in order to lessen that pressure.

Okay, Jim. Thank you very much. Bethan, did you want to add anything?

Just to say, 'Yes, increasing supply is the answer' is what I would say. And if there are opportunities to release land banks, maybe look at empty properties or conversion of commercial properties to create new homes, then that is part of the solution.

Build to rent is contributing a significant proportion to the market, and these larger build-to-rent schemes generally tend to be very well managed and run, because the reputational issues for the investors are so substantial. So, if we're looking at net gain of housing, then, actually, build to rent is one of the few solutions that we have with regards to a private sector solution. The existing landlord more tends to shuffle properties in and out of other tenures rather than creating new-build properties from scratch.

Well, that takes us on very nicely to Sam Rowlands and Sam's questions. Sam.

Yes, thanks, Chair, and, as the chairman just said, just building on that point on the build-to-rent market, I was just wondering if any of you would have a view on whether more could be done to stimulate the institutional investment to enable more build to rent. Is there a role that Welsh Government could or should do to improve that?

I'm afraid to admit I don't have any expertise in this area, so over to other colleagues.

I've done a little research in this area, but I'm just trying to draw the conclusions to mind. So, most of the problems come around the initial uncertainty in setting up a scheme, and, actually, with the large-scale investments required for this, a lot of the uncertainty is what puts off investors. Their fear is that they may not get planning permission for the development or that they may not be able to attract sufficient people from appropriate client groups. Very often, developments tend to be focused towards young professionals, whereas, potentially, there's greater longevity in schemes if you're focusing accommodation designed, rather than as high-profile, shiny, high-expense properties, as accommodation for families to live in long term. So, it's helping them to assemble sufficient investment, and then guarantee the success of that investment through the build and initial tenanting of the properties. And then they have a lot of fear over what if the tenants just all get up and leave, or, if they have poor press reports on damp and mould that's starting to appear in these properties, they're worried that their investors will then pull out of these schemes. So, really, it's about providing reassurance, particularly at a stage where you're starting to collect a number of people with capital together to get a scheme going, and then reassurance in particular over that planning permission in order to get a scheme going.

Can I just jump in, Henry? There are two stages to risk there, isn't there? There's the post-build risk, which is managing tenants and perhaps some of the issues you raise there. The pre-build risk: do you think there's a role for Government to play in terms of underwriting some of the costs associated with those, the pre-build risks, like you say the planning process and that type of thing, whether they would underwrite some of that to encourage those institutional investors to come along with the big capital sums for the build? Is that interesting or not?

I think a lot of the organisations that I've found who are getting involved with this are trying to diversify their portfolios, and they're longer term investment solutions, which are tolerant of the long term but with smaller profit margins. We're talking—. Pensions might be a good example of this. So, if you had a Government-backed guarantee that the scheme would go ahead, or help in supporting gathering together investors for a scheme, then I think that would mean investors would feel more comfortable about that initial uncertainty period. Because there are a lot more other things that they could invest their money in, with greater degrees of certainty, and it's that initial section until you've got the tenants in. Once you've got the tenants in, and you've got a big block full of housing, the tenants aren't all going to up and leave all in one go—that's probably more something that would keep someone up in bed unreasonably. But in this sort of situation, a lot of the uncertainty is getting the scheme constructed, and then opening it up, and, once you start getting it tenanted, it generally looks after itself for that period. So, it's providing support through that initial stage. I think Jim wants to add to that.

In terms of what the Government could do, I think that it looks back to perhaps the first question, about the reputation of the private rented sector. I think that the Government can actively promote a positive vision for the private rented sector, and to encourage the private rented sector to be seen as a safe, secure option for people to meet their housing needs. So, in terms of their overall role as custodian of the housing system in Wales, I think the Government have got a role in positively promoting the private rented sector, and, within that, that gives some of the encouragement and certainty that Henry has alluded to around the decision making for longer term investments on the part of institutions and others.

Can I just add to that? If we were to develop that kind of model, I can see that it might work to have, as part of the criteria or the agreement, professional letting and managing agents being part of the model at the end, so that there is a professional management system as part of the package. And maybe that justifies a little bit of Government money going in at the set-up stage, in any event.

Thank you. I can't see anybody else's hand wanting to come in there. Just more broadly on supply and demand, you've touched specifically there on some of these big institutional investment-type ideas or projects. Are there any more interventions, do you think, that Government could be doing to address some of the supply and demand issues we're seeing in the private rental sector at the moment?

I'll come in. We've got Leasing Scheme Wales, which has made a really good start—we've got good numbers coming through now. So, there's the opportunity to upscale in that regard, I think. The difficulty with that is the linkage with the local housing allowance rates. I'm aware, obviously, that the local housing allowance rates have gone up recently, so that's a really good thing. But that is the limitation, I think—you'd have lots more landlords coming in if the business case stacked up for them.

But are there houses for landlords to get hold of? Whether the business case stacks up or not, are the properties there?

There's a shortage of supply in general, so, yes, we need to increase numbers. We mentioned earlier the opportunities to bring back empty properties, and potentially to convert certain office buildings, maybe. So, yes, there is a need for a general increase in all tenures, and I guess then the private rented sector just increases as a proportion of that.

Thanks. Chair, if I may just move on a little. Jim, you touched on this in your comment a moment ago about reputation, and trying to encourage and support landlords as well. Do you think more can be done to support landlords to manage anti-social behaviour or other problems that can threaten a tenancy?

Shall I pick that one up? On anti-social behaviour, for landlords, it puts them in a rather difficult position, because, ultimately, the solution is to evict the tenant that's causing the anti-social behaviour, but through evicting the tenant you're removing your income. That then leads us to having to fall back onto behaviour change mechanisms that the landlord is trying to introduce. They're again limited by the fact that the landlords can only interfere with their tenants so much before it's seen as harassment. And so the landlord has got a bit of a tricky tightrope to make their way along.

Solutions such as local authority Housing Act 2004 licensing schemes provide a means that brings landlords and tenants closer together to enable the local authority to develop partnership arrangements through their licensing teams with local authority anti-social behaviour teams and with the police, and to place conditions on licences that help to compel landlords to take measures where they're reluctant to do so, and provide the ability to do things such as get references from tenants as a mandatory requirement and compel them to provide references where they're asked to by other landlords.

At the moment, Housing Act 2004 licensing schemes for houses in multiple occupation are limited to properties that have three or more storeys, or five or more occupiers. There's a lot of demand from the elements of our housing expert panel—the heads of local authority enforcement teams—to expand the mandatory HMO licensing to all properties with five or more unrelated tenants. That would do an awful lot to expand the proportion of properties that could be addressed—so, where anti-social behaviour is likely to occur due to high-density occupation. And that anti-social behaviour is not necessarily intentional; it may also be through mismatches in the lifestyles of such large numbers of people living in very close proximity.

Another thing that may also help is—. There's a lot of uncertainty in bringing in additional licensing schemes that allow local authorities to select an area, and then expand their licensing to smaller shared rented properties with unrelated people living in them. At the moment, there's a large degree of uncertainty and an awful lot of upfront investment around whether these schemes get approved or not to be initially brought in, and then they can only run for five years. In the first two to three years of these, you'll be getting the partnership arrangements going and contacting the landlords in that area, building relationships. Over that five-year period, you've got to inspect every property in that area. That's a really tall order with some of the recruitment shortages that we've got. You're asking people to come in on a five-year contract, so a lot of people will go, 'No, I actually prefer something a bit more secure'.

Henry's already mentioned that our landlords tend to have a limited number of properties; in fact, most of our landlords have one property each. So, if they come across a tenant that is causing anti-social behaviour and they get complaints from neighbours, et cetera, they've never dealt with that issue before in reality, and it's a difficult thing to deal with. You've got the police involved, the local authority involved often, and collectively people aren't able to deal with these things. Social housing landlords find these matters difficult to deal with. And so I guess my position on this would be that we need to provide more assistance to landlords about how they manage those situations, maybe give them clear lines of communication with the police, with the local authority, and provide them with elements of support that they would be able to access to assist them.

And then, if eviction is the only way of dealing with particular individuals, we need to look at the court system and how quickly we can take that anti-social behaviour type of case through the court system. Often, it takes a long time, despite the fact that the notice periods are much shorter for that kind of activity. So, there are some challenges there, and it's difficult for landlords to deal with those tenants. Because they don't want to evict their tenants. That's not the outcome they want.

Thank you very much. Sam, are you content?

I had one more short question.

Go on, and I'll bring you in then, Carolyn.

It's just building on the role of landlords supporting those tenants. Because we have heard already about some private landlords specialising in accommodating tenants who are perhaps homeless or have some specific support needs. We mentioned some of the anti-social behaviour side of things, but what about those tenants who may just need additional support because of all sorts of different reasons? Is there anything else that could be done to support those landlords who want to offer that additional support for those tenants? How common do you think that type of landlord is in Wales at the moment—those who want to proactively help out those who perhaps are a little less fortunate at the moment?

It's difficult to tell how many landlords are in that position. I do talk to local authorities quite often about the trickier landlords with the more challenging tenants. What you end up with, often, is a landlord with a more significant portfolio letting property to people on local housing allowance, and often these people are placed in those properties by local authorities, and they do have significant needs. Most often, they're single people, and the local authority can't find other places to house them. So, there's an odd relationship between the local authority and the landlord. The housing options teams have got a good relationship with them, because they're helping them to resolve an issue, whereas the environmental health teams are struggling to make sure that the conditions in these properties are maintained to a good enough standard. And yes, that support, that network around it, doesn't exist to the extent it should. Two out of the three cases that come to mind for me at the moment have landlords who live away from Wales, so that's another kind of complexity, where they've got local employees, but the controlling mind of the company and the business is not there to manage that as closely as they should. So, there are all sorts of complexities, I think, around that.

I'd look at the housing support grant and the lobbying that I'm sure committee members will be aware of recently around sustaining and increasing housing support grant. This is a key tool for housing providers and for support agencies to provide the support for just the kind of tenants that Sam was referring to. I think we've got the architecture, we've got the methodology; what we need to make sure is that we don't lose those providers through underinvestment in the housing support grant.

I also look at the recent consultation on the ending homelessness White Paper, and there was a proposal in there for putting a duty on local authorities around tenancy sustainment. For homeless households who have come through the homelessness system and then are provided with a tenancy, there will be a duty—or a proposal, certainly for a duty—on sustainment. So that, again, is moving in the same direction in the round, ensuring that the authority remains engaged and that sufficient support is commissioned and put in place to give the tenants a reasonable chance of sustaining that tenancy. So, it's certainly a direction of travel that I recognise in Government policy.

So, Jim, that housing support grant is significant for private sector landlords, then, in helping to support their tenants when those tenants need that level of assistance.

I don't have figures on the breakdown of how much money goes to private sector landlords, but it's not a new model. I've been around long enough to be here at the inception of Supporting People, the predecessor. It was common for landlords supporting vulnerable individuals to fall within the scope at that time, and that's been maintained throughout the transformation from Supporting People into housing support grant. So, yes, it's a very important fund for commissioning support services for vulnerable tenants.

Okay, thanks very much, Jim. Carolyn.

I wanted to ask some questions about that. There's been pressure put on for the HSG to be increased. I think a little bit more money has gone into it in this budget, hopefully—it sounds like it. If there's a duty on local authorities to provide that support in the White Paper, what about the councils that don't have their retained housing stock—they've gone to a transfer landlord instead or housing association—so they haven't got the housing support team in that local authority any more, but maybe you have RSLs in that area that provide homelessness support instead, would they be directed to those areas instead? I just wondered how they work together. Jim.

It's difficult to answer the specific question around what may become a duty on authorities, which obviously has gone out to consultation, but needs to be turned into legislation. So, there'll obviously be further discussions around exactly how that would work. But even authorities who've transferred their housing stock have housing options teams. They do commission housing support grant services. So, there is that. Of course, there's pressure on resources, but there's an infrastructure there to commission and monitor services and to provide some support in those circumstances. The fact that you don't have your own housing stock may take away some of the bulk around resources—it's easier when you've got your housing revenue account—but the housing support grant and the general fund services are common to all authorities, whether you've got a stock or not.

Can I ask another question to Jim? Do the housing options teams also look at what's needed in a certain area as well, so, if new developments take place, whether one- or two-bedroomed accommodation is needed, whether that's for private ownership or for rent?

Every authority is required to produce a housing prospectus, which is supplementary to the planning documents, but it's part of the commissioning framework that they operate with, either developing their own homes or developing homes through RSLs, so commissioning there. They put together a prospectus that looks at the housing need in the area and sets out priorities for development. So, typically, as you say, it will identify a shortfall in single-person accommodation, which is in very short supply in many areas in Wales, and will prioritise that as an area of investment by RSLs and others. There's then a series of negotiations and opportunities, if the land becomes available in the right place and all the rest of it, through that development process, but authorities start off with that prospectus setting out their priorities for development, which wouldn't necessarily cover the private rented sector; it would focus on the social sector and the affordable housing sector and commissioning arrangements with RSLs and other developers.

Would it be beneficial, then, to expand into the private sector for what's needed for development, do you think?

I think that, strategically, it wouldn't be a problem for authorities to set out what their priorities would be in terms of overall supply. I think that the commissioning arrangements are there with social housing providers. They're not there in the same way with private sector developers, and the decisions made by private sector developers in what they build and supply is a very different process. We have, of course, planning arrangements and planning frameworks in Wales, local development plans and others, that do set out a framework around housing and other requirements in the area. So, that's the framework within which private developers and the private rented sector supply would plug into. But there's no reason that the housing function in an authority can't set out overall priorities for supply in their local areas.

Okay. Thank you.

All right, Carolyn. Do you want to go on to some of those other questions—partnerships between social and private landlords?

Okay. [Inaudible.] So, just to ask, really, to what extent are local authorities and housing associations acquiring stock from private landlords who wish to leave the sector? Can you share thoughts on the potential for this intervention to prevent tenants from becoming homeless? You've talked about this already, haven't you, about interventions there. And to what extent do you think it's happening now that local authorities and housing associations are acquiring stock from private landlords? Do you want to expand any further?

I can't speak to give volumes, I suppose, currently. But I know that, historically, we have worked with RSLs to acquire properties from the private rented sector or the private sector in general. And it does come with problems, because what you're doing is you're—. Because you've got a buoyant market, a landlord can put a property on the market and get the market rate. The system that I recall using a few years ago within the council requires the district valuation office to then come and give you a valuation for the council to purchase the property. I'm not sure whether that is the system that we currently use. But that provides a little bit of a barrier for two reasons: often, it's not market value, and it's also a bit of a delay. So, generally speaking, if a landlord has decided that he wants to sell a property he wants to do that fairly quickly.

But what we are finding in Rent Smart Wales is that registered property numbers have changed over the last five years or so, and we've seen a bit of a dip. That, in part, is to do with forced cleansing of the data, because the registration has to be redone every five years. However, what we have seen is that there's been a move from smaller portfolio sizes to slightly larger portfolio sizes. So, what I'm suggesting here is that, actually, landlords will often sell to other landlords and so there might just need to be a little bit of research there in any event, because it might not be as big of an issue as you think it might be, because, actually, these properties are staying in the sector, quite often, and, even if they are being sold for owner occupation, that's still housing somebody at the end of the day, isn't it?

I think just one small point just to add on to that, which is that, speaking to housing associations, they need to deal with properties at volume, and so if they're purchasing properties that are spread over a large geographical area, so it's a pepper-potting-type approach, then it's much more difficult to manage maintenance on these properties and a much less cost-efficient model. So, of the ones that I've dealt with directly, there's been a certain reluctance for these sorts of schemes, because they are so much more cost intensive and resource intensive to manage.

Thanks. It makes sense. Jim.

And Jim, I think, wanted to come in on the back of that. Jim.

I'm aware certainly over the last couple of years of a number of examples of portfolios of fairly significant numbers being acquired by councils or social landlords, and that has been as a result of greater flexibility in the funding arrangements between councils, RSLs and Welsh Government, so greater flexibility on the part of Welsh Government, with a clear focus on increasing the numbers of social rented homes directly through acquisitions. Sometimes, that's with larger portfolios, but, much more commonly, it's about reacquiring properties that were formerly sold under the right to buy. And we've seen some fairly significant numbers coming from former right to buys back into the social housing stock of landlords, primarily local authorities, but some RSLs as well. And that overcomes some of the difficulties that Henry just alluded to around geographical spread, because often these properties are within estates that still have an element of social housing within them, and so the homes, we know, can be adapted to be brought up to the Welsh quality housing standard, because landlords have got the experience of doing that with their own stock, and also management services are available because you're covering the patch anyway. So, that's been a change that I've seen over the last two or three years in terms of a greater willingness and flexibility on the part of Welsh Government to support acquisitions rather than purely focus on new build.

Okay. Thank you. Any other ideas on upscaling leasing scheme Wales? Anything else you can think of?

I think I mentioned earlier that I think it might be quite a helpful idea for properties, where you've got a large landlord, similar to the example that Jim was just explaining there, where you want to secure a change in the management of that property or portfolio of properties, maybe we could use leasing scheme Wales as an option for that. We're looking at empty properties at the moment, whereas, obviously, this would be occupied properties.

Okay. Thank you. Shall I carry on, John?

Yes, Carolyn. Please.

What's your view on the Welsh Government's legislative consent memorandum on the Renters (Reform) Bill, which will create new criminal offences for discrimination in relation to children or benefits status? Have local authorities been fully consulted on these proposals as well, Jim? Bethan, do you want to go first?

So, personally, I think it's a really good idea—overdue, if anything—and can only benefit the sector over the longer term. Certainly, from my perspective, we have had Welsh Government officials come along to the housing expert panel and brief local authority staff members across Wales about the proposals, and, similarly, they have attended a Rent Smart Wales stakeholder group meeting, which is attended by a whole host of stakeholders involved in the private rented sector. So, there has been a presentation there as well.

Okay, thank you. Jim, did you want to come in?

Sorry, no, nothing to add. Bethan's covered off everything there.

Okay. Thank you. So, enforcement, it was raised earlier that that could be an issue. So, I guess that would fall on local authorities, regarding enforcement, so, any thoughts on that, really.

There's the issue, Jim, isn't there, of the criminal law being used for enforcement, rather than it being a matter of civil penalties.

Shall I come in there, Chair?

Would you, Bethan? Yes.

So, there are benefits to both approaches, in reality. Civil penalties are helpful where you want to secure a quick change, an immediate change in behaviour and immediate compliance. So, there are certain places, which we might talk about later, where I would think that civil penalties might actually be helpful. In this particular case, what you'd end up with—as it's proposed, it's a criminal outcome here—is a conviction. Now, convictions can help us in Rent Smart Wales and local authorities when we're determining licence applications for fitness and propriety. Whereas, if you go down the civil penalty route, in a sense, you're discharging that liability for the offence, so there's no real record of that being an issue. So, it's helpful for licensing decisions for this to be a criminal activity.

May I add to that? With regard to relying on the tenants if—. There are concerns around the enforceability of some of this, as you've got particularly vulnerable client groups that would be forced to make a complaint against somebody who is their accommodation provider, or potential accommodation provider. In the lower end of the sector, they have fewer options, so it's something where there may be some difficulties in the mechanics of actually enforcing it. There's some element of mens rea in that there is an intention and there are defences under the Renters (Reform) Bill detailed around this, which would indicate that you've got to actually demonstrate a guilty mind in trying to ascertain whether an offence has occurred, unless you're talking about, say, a contractual term that had been put in that was quite straightforward. So, it's something that is going to be challenging for local authorities to enforce in practice. But if it's something that's a broad-brush approach that you're just not allowed to do, as long as it's well enough publicised, then, hopefully, the sector will largely self-regulate it, because these whole-sector approaches generally tend to be more successful as everybody knows what the bottom line is.

Just to balance out the argument around using civil penalty notices, as I'm quite familiar with their use in the English market, the local authorities that I've gathered data from have described that a similar burden of proof is required for prosecution in order to administer one of these. They do have the benefit in that, at the moment, a prosecution represents a net loss to a local authority—although they get the successful result, hopefully, a lot of them won't go to a successful result. The levels of penalties vary massively when they do come to courts. So, it provides more certainty over the punishment level that a landlord will receive, but then there have been reports of difficulties in trying to recoup the cash, which has to be obtained through a county court judgment. However, if they do get that money, then they can plough it straight back into that department in order to fund further activities to promote the improvement of the private rented sector.

If you're using a prosecution as an alternative, that then goes off to the central crown purse somewhere, and so, all of the investment, time and effort that it's taken you to take the person through the court and fees for barristers where required is all a net loss to your department. So, it provides a very unreliable funding stream, but they do provide some money going back into local authorities. It's certainly not the predictable and sustainable sources of cash that local authorities will be wanting for this sort of enforcement, but I feel that it would be remiss of me not to mention that local authorities are having another duty placed upon them with this sort of work, and we need to make sure that local authorities are appropriately resourced to be able to manage additional legislative responsibilities.

Thank you. That's useful.

I'm sure Jim would agree with that last point, Henry. Jayne Bryant. Jayne.

Diolch, Cadeirydd. Good morning, everybody. I'm just going to talk a little bit about regulation. You might have touched on a couple of these points, but what evidence have you seen so far for the impact, both positive and negative, of the Renting Homes (Wales) Act on the private rented sector?

I guess that's one for you, Bethan, isn't it?

I would say that the impact has been positive. That's not to say that it hasn't been a difficult change that we've had to work our way through over the last couple of years. But, yes, it's been a massive change. We've had thousands of people who have been trained—when I say 'thousands', I probably mean about 35,000 have actually completed training on renting homes over the last couple of years. At the very basic, the number of smoke alarms that you've now got in place, the number of carbon monoxide detectors, electrical certification, all of those things are probably in place for the vast majority of the sector. So, that's got to be a success. I can't think of a time when we've achieved such a change over a fairly short period of time in physical standards in a property, so it's got to be a win.

I'll take my opportunity here to talk about damp and mould very briefly. That is one of the issues that we see coming through thick and fast, complaint-wise, from local authorities at the moment. My new idea is that we've secured this change in the private rented sector with smoke detection and carbon monoxide actually quite easily in the end, almost overnight. Just installing extractor fans in bathrooms could make a massive difference in properties, in my view. So, yes, it's been a challenging change, it was confusing for landlords for a long time, and I'm sure some of them are still confused, and we'll have to work with them on that. Similarly, tenants are struggling to come to terms with the changes, so it is an ongoing process, but I think it's been a success, in my view, so far.

Brilliant, thank you. And I think the point you made around damp and mould is a really clear point, and I think it's really important that you've got that feedback as well. And just around some of the other issues that people are facing, we've heard that, with engagement with tenants, some people are still not reporting disrepair for fear of retaliatory eviction. Is that something you recognise? And apart from the damp and mould issues, have you seen any other impact in terms of fitness for human habitation provisions in the Act?

I'll pick that one up first. So, just as an example of good practice, what we now have is that fire services across Wales, every time they go into a private rented property and install a battery-operated smoke alarm, which they've been doing for years, we now have a data-sharing agreement with them—they tell us and we tell all the local authorities as appropriate across Wales. So, that system has now been established. We get hundreds of those, so we are learning about those properties, I guess, is what I'm saying. So, that's a good thing.

Retaliatory evictions have always been a concern for tenants, because you don't want to have your relationship with your landlord break down. So, it might not be that the tenant particularly thinks that they will be evicted as a result of making a complaint, but they just don't want that bad feeling, I think, between them and the landlord, and you can understand that. What we've tried to do, and local authorities across Wales have done this as well, is to develop resources that include template letters, template texts, template e-mails for tenants to use to report repairs in a way that will help them if they end up needing to go to court. So, obviously, all of this is going to take time. This is all very new at the moment, but we are putting those resources in place consistently to make this change over time.

Thank you. And according to Welsh Government data, the number of local authority inspections under the housing health and safety rating system was 23 per cent lower in 2021-22 than it was in 2018-19. To what extent do you think this is due to a lack of resources, and what are the wider consequences of fewer inspections being carried out?

So, I will ask Henry to come in on this point, and I think resources are a big issue, but I think that that reduction in number has in part also been as a result of COVID and the recovery period from COVID there. Henry, do you want to talk about resources and training?

I think that's quite a valid point. With regard to the reductions that we're seeing in levels of inspection, this is one of the few quantifiable indicators we have of some of the difficulties that local authority enforcement departments have been experiencing with regard to recruitment. So, we have a long-term recruitment shortage in environmental health, and it's something that's recognised as a national problem in both England and in Wales, and over in Northern Ireland. There are various reasons for this I could go into at length, but we find ourselves in a situation where local authorities, even when they have a budget available for a post, are getting in touch with me as the programme director on Wales's only degree course on environmental health, and they're saying, 'What can we do to get your graduates come to us?' But we're not seeing as many people coming through the door. There's a lot of work being done to make to try to make the profession more attractive to potential applicants, but, in England, the apprenticeship model has been the main solution for driving the recruitment of new staff into the sector, and at the moment we have no level 6, no degree-level apprenticeship for environmental health staff. In, for instance, Middlesex University or in Weston College, where they've got apprenticeship schemes, they've moved over from having programmes with between 20 and 45 students in a typical year group coming in through UCAS to now getting two and 11 coming in through UCAS, and the rest of the 45 is made up through the apprenticeship scheme applications. And so we really need to see some more of that.

As this moves over into local authorities, we have what I refer to as Schrödinger's hazard problem, in that you don't have a hazard in rental accommodation until someone's been in who has got HHSRS training and qualification and they've gone and done the inspection and found there to be a category 1 hazard. And so, until you have that, it's very difficult to enact a solution to that problem. So, our ability to resolve health and safety-related issues within our rental accommodation is being strangled by the fact that we don't have the people to identify those problems and to trigger the actions to resolve them. And landlords largely are small-portfolio landlords and will be reactive to problems when they occur, and so they will wait until someone has come along and told them that they've got a problem before trying to second-guess what they may or may not need to do.

HHSRS is an entirely risk-based system, and so effort is being targeted in appropriate areas to deal with problems, but it doesn't allow self-audit, which these minimum standards approaches that we've just talked about are very effective in doing. It also allows landlords to come up with programmes of works, which they can manage for problems, which they can actually self-audit their properties against, including their costings. But, as we're seeing this recruitment crisis coming through into reduced staffing numbers, with over 56 per cent of posts in England and Wales remaining open for more than six months without being filled, we're seeing long-term problems with providing skilled regulators to go in and identify the problems. And if we see this, then we've got no way of addressing these problems in the housing stock to provide improvement. What we'll actually see in the longer run is an increase in the level of health-related problems associated with the rental sector, which—apologies for quoting an English statistic here, but in England that amounts to—. If you look at the Building Research Establishment papers, there is a whole series of modelling for category 1 hazards in the stock and the costs to the NHS, and they've set it in the top four for health impacts alongside obesity and cancer. So, if you have a chance to refer quickly to some of the briefing reports on the real cost of poor housing, they're excellent for summarising the impact of not handling these problems.

Okay. Jayne.

Brilliant. That's really helpful. Thank you for that. We've heard a call for local authorities to have greater powers to permanently exclude persistently non-compliant landlords from the market. Do you think the law needs to be strengthened when it comes to dealing with persistent rogue landlords?

Yes, absolutely. I guess the sanction that we have, or one of the tools that we have, is licensing. And the problem with the licensing process is that you can refuse a licence, and that's great, but in theory the landlord could apply for a licence the following day. At the moment, our fit-and-proper person guidance doesn't allow us, or the legislation doesn't allow us, to say, 'You are prevented from holding a licence for a number of years, subsequent to the decision.' So, that's a problem. And that is different to the approach that is taken for something like taxi licensing, for example. So, there is an opportunity there for us to do something different.

Great. Thank you.

May I add—?

Sorry.

May I just add to that? Something that Gareth, who is unable to be here today, mentioned is that it would be helpful to have the ability to use a banning order for the persistent offenders. Most local authorities know who their poor operators are in their area, and so they're constantly having to deal with the same people, but the magnitude of the punishments that they're using and the variability in the levels of fines that they're getting if they do prosecute mean that it's very difficult to make these sufficiently injurious for their business model, and so they become more of a, you know, bump in the road that they need to navigate, and if they can steer their way around it through avoidance, then great. If they have two, then they can cost that out into their business models. So, where they've got entrenched poor behaviour, having the ability to ban operators from the sector permanently would be very effective.

At the moment, the existing provisions around management orders, which are available through licensable properties, are nearly impossible to enforce. I've done considerable research on this, and if the local authority takes control of the management of the property, there's at least seven opportunities for appeal in that process for the landlord, who has to spend a maximum of a couple of hundred pounds on the appeal, and it costs the local authority thousands or tens of thousands of pounds in order to rebut those appeals, and every time we get an appeal, everything stops until it's gone through the residential property tribunal, which may take up to a year for a hearing, and the outcomes of the hearing, the conduct of the hearing are very variable. So, that level of uncertainty, compounded by the fact that we have to employ somebody to manage these properties, and then that requires us to go through purchasing processes for a theoretical income that may never be realised, that's a bit of a tall ask if you're trying to employ a private agent to manage it, which brings us back to the solution that Bethan mentioned, which is the potential for these to be made available for long-term leasing arrangements for provision of accommodation for those that are homeless.

So, the management order system would require substantial change to the housing Act in order to make it more effective as a regulatory solution, but that complication and the large degree of uncertainty are largely why it's not used as an option and why banning orders might be a much more simple way forward.

Okay. Let me just bring Janet Finch-Saunders in on this point. Janet.

[Inaudible.]—years ago, when I was a cabinet member of a local authority, I was involved with the serving of an anti-social behaviour order on a rogue landlord. This was long before Rent Smart Wales, and it was mightily effective, and it went to the degree that the landlord then had to get another manager in to be able to, you know, have these properties. A lot of them at the time were houses in multiple occupation. So, there are ways and means, I believe. But also, to Rent Smart Wales now, as well as landlords signing up with you, you do have a responsibility to go after those landlords who are not signed up. There are, as I say—numbers have been mentioned earlier, 30,000-odd—a lot of law-abiding, good landlords, private sector landlords, but what actions is Rent Smart Wales taking to go after those landlords who are just completely ignoring the fact that you exist, ignoring the law and, in a lot of instances, are proving to be either rogue or certainly not landlords that you could describe as being good landlords?

Okay. Bethan.

Yes. We do lots of things to both—. I see this in two ways: we have an enforcement role, which is all about bringing those people who are operating outside of the Rent Smart Wales system, if you like, into the system. So, we investigate complaints that come to us via a whole range of different agencies, and we also work with local authorities to seek information about housing benefit claimants, council tax claimants, et cetera. So, that work does go on within Rent Smart Wales. We've got nine enforcement officers who just purely do that. If you wanted to have a look at our performance levels, there is a dashboard on the website that is all about enforcement, and that shows you the huge numbers of people that we secure compliance with without even getting to the enforcement stage, but also, then, the number of people that we serve fixed-penalty notices on and then take forward for criminal prosecutions. So, that is those people who are operating out of the system and, you know, trying to bring them in.

We then also have those people who have applied for a licence. Now, it might be that those people who apply for a licence, at licence application stage, are not fit and proper to hold a licence. In which case, we will refuse. We investigate those, we refuse those licences and make sure that there's somebody else suitable to hold the licence to manage that portfolio, and you can see on the residential property tribunal websites some of the cases that we've taken over the years. And again, the numbers are on our website, in any event. But, for those people who become, if you like, not fit and proper during the course of the licence, the sanction is to revoke and we do that. But before we get there, there's a whole host of other options that we take. If we get complaints from tenants, we investigate them, we provide advice and assistance to landlords about how they get better. We occasionally have a representations meeting with a landlord and lay it all on the line for them, and sometimes that actually works, and they change their behaviour. So, yes, we do all of these things to effect the change.

Okay, and then a quick one on the back of that. I've had it where tenants have come in with concerns, so we also refer them to the environmental health enforcement team, who have statutory responsibility for housing. They just don't have the resources or the officers to go and check it out. But I've got a number of tenants who've approached me that maintain they've written to or phoned Rent Smart Wales to report their landlord, but their concerns were not taken any further.

Every report that we get is looked at, and we write to the landlords in each of those cases. We also refer those out to local authorities. So, it might be that the evidence that we've got is not sufficient to do anything significant with, and you certainly wouldn't revoke a licence based on one report. So, it depends a little bit on the expectations of that tenant about what the outcomes would be.

It's more the ones who are not licensed—

Oh, right. Yes. Where we have evidence that people are not registered or licensed, they are investigated and taken forward.

Okay. Back to Jayne. Jayne Bryant.

Diolch, Cadeirydd. You suggested a statutory scores-on-the-doors rating scheme for letting agents. Perhaps you could tell us a little bit about how you'd see this working in practice.

Yes. So, actually—I didn't mention earlier—the licensees are issued with a set of licence conditions, and what we do in Rent Smart Wales is to audit commercial agents with a property portfolio. We had to make a decision about where we start here. We audit commercial agents with a property portfolio of over 20 properties, and there are about 600 of those in Wales. We've audited about half that number to date, and we give them a rating of between 'urgent action needed' and 'best practice'. It's a time-consuming process. However, I think that most of the agents that we have been involved with over the last few years will say that, whilst it might have been painful, they have found it extremely useful. We're seeing probably every agent that we're auditing make some changes to their business practices as a result of this. But the advice that we give is really worth while. In fact, over the last year, it's been invaluable in bedding in the new approaches to occupation contracts. So, as an example, we've had personal conversations with the NRLA, with Propertymark and Safeagent about the template contracts that they now issue to the sector, and we've been able to work with those organisations to actually advise them what our position is and how things should be presented. Given the fact that agents actually manage 55 per cent of the sector in Wales, just getting it right with agents makes a massive difference. So, I would say we've got all the building blocks in place already within Rent Smart Wales for, effectively, a scores on the doors. You might argue that we could just go ahead and do it because we've also got the public register. In a sense, if we were to have a freedom of information request, we may have to provide that information in any event. So, could we actually put that information on the public register as it stands at the moment? But I would argue it's not the right way to go, because, if you look at the food hygiene rating system, for example, it's enshrined in law, and there is a proper appeal process that comes with that that gives the business a bit more security about the outcome, if you like.

So, I think it would be a great direction of travel for us. The impact of a scheme that allows the customer to make choices is just incredible. We saw that—. I managed the Cardiff council food safety team when we brought in the food hygiene rating scheme, actually, and, within 18 months, the number of premises that had shot up to a 5 rating overnight was remarkable. So, yes, I would say that's a good way to go.

Okay, thanks for that. We've got very little—

Diolch, Cadeirydd.

Diolch yn fawr, Jayne. We've got very little time, I'm afraid, but we've just got a last question or two from Janet Finch-Saunders on data. Janet.

Thank you, Chair. What should be the priorities for the Welsh Government to improve their own data collecting? And, for you in Rent Smart Wales, what are you doing to improve the accuracy and accessibility of your own data? For instance, do you have an accurate data record for the number of landlords who leave the sector? I've been advised, and it's happened to me personally, whereby you deregister, but you still continue to receive all the updates and everything. Also, when I've put an FOI in previously, asking how many have registered, how many have deregistered, the responses back have always been very sketchy.

Okay. So, firstly, for the Welsh Government, then—before we get on to Rent Smart Wales—what might the Welsh Government do to improve data on the private rented sector? Any ideas there from anyone?

So, at the moment, we've got the Welsh housing survey, and it's very good to see that being used—again, an excellent resource for us. The data that provides is really valuable in trying to ascertain things such as the impact of the activities that we've undertaken over the years. Within a local authority area, there is a lot of value to providing resources to allow local stock condition surveys to be undertaken. The Welsh housing survey provides an excellent source of data, but, due to the nature of the survey being on a national basis, you don't get that level of close scrutiny of area-by-area or postcode-by-postcode problems that you can get through a local house condition survey. And that sort of thing enables—if a local authority is undertaking it—them to cross-reference data on the housing stock against other data sources, such as levels of health and well-being, levels of anti-social behaviour and crime, levels of deprivation. And that sort of data taken back to the unique property reference numbers for individual properties, as long as you treat it with due caution with regard to freedom of information and ethics, actually provides an incredibly valuable information source that helps the local authority enforcement teams to focus their attention where the need is greatest.

The Welsh housing survey lead—I sit on their advisory panel—was trying to get something called the 'housing stock analytical resource' up and running—so HSAR—and this work involved a very slow process, with a lot of trust required by data providers to share this into a common repository. The last time I looked at this it was managed by Swansea University, and this enabled data sets to be pieced together on a postcode-by-postcode basis for just about anything, which is a utopia. I appreciate I'm describing, but this has been the Welsh housing survey going out and speaking to people, cap in hand, about 'Wouldn't it be nice if you could provide your health data for this area broken down by postcode, or your income data and such like?' If it had greater buy-in from more senior positions in the Welsh Government, then that would provide a more supportive atmosphere for an initiative like that, and then it allows us in Wales to have a data-driven policy environment that has some real power behind it and some real specificity with its level of intervention around Government policy and, ultimately, local authority activities.

Thanks very much, Henry. Did you want to come on to Rent Smart Wales, Bethan?

I completely agree with Henry that a house condition survey would be very useful. From a Rent Smart Wales perspective, what I would first say is please have a look at the interactive dashboards that we already have on the website; there's an awful lot of data there, and our aim is to release more and more as time goes by and we have the functionality to do so. Obviously we're limited by what we collect, and there's always an opportunity to review the information that we collect through the registration form. Obviously, at our first launch, we had a set of things that we wanted to collect at that time; we reviewed it five years later for renewal, and I would say the best time to review it again would be for the next renewal period, which starts in 18 months' time. So, there is a bit of an opportunity there for us to think quite carefully about what would be useful strategically, and to revise it if needed.

I guess another opportunity that registration provides us with is to maybe move in the same direction as the Renters (Reform) Bill in England, and that is to look at capturing some property-specific data—so, for example, gas safety certification, electrical safety certification, maybe something around a statement of fitness for human habitation or an MOT kind of proposal. So, there's also an opportunity there. The benefit of doing something like that is that it's self-certification, but it takes less resource and potentially reduces the burden on local authorities for inspection. If it were to be done on the Rent Smart Wales website, then what you effectively have as a result is a management dashboard for the landlord to use to help them manage their portfolio, so there's a bit of an opportunity there. I think that's probably all I've got to say about data.

That's probably just about all we've got time for as well, I think, Bethan. Thank you very much for giving evidence to committee today, and thank you, Henry and Jim, as well. You will be sent a transcript to check for factual accuracy. Diolch yn fawr.

The next item on the committee agenda today is papers to note, item 4. We have a response from the Minister for Climate Change to the Children, Young People and Education Committee regarding the White Paper on ending homelessness in Wales; a letter from the First Minister to the legislation committee in relation to the Data Protection and Digital Information Bill; and a letter from the Minister for Finance and Local Government regarding the Local Government Finance (Wales) Bill, which follows on from the evidence session before us on 7 February. Papers 9, 10 and 11 are letters from the Counsel General and Minister for the Constitution in response to reports by this committee, the Finance Committee and the legislation committee on the Elections and Elected Bodies (Wales) Bill, setting out the Government's response. Papers 12 and 13 are letters from the legislation committee to the Minister for Climate Change and the Llywydd in relation to the Renters (Reform) Bill LCM, which we will be considering later. Are Members content to note those papers?

Can I just raise something regarding the data Bill—what number is that? It's the Data Protection and Digital Information Bill.

Yes, a letter from the First Minister.

There was an element of it that was added on by the Secretary of State to look at having a national underground asset register. So, I wrote to the climate change Minister regarding that, to highlight it, which I think would be a positive thing to have. But I'm just concerned, because I think it was going to the Secretary of State for Wales regarding delivery of it. So, I asked for more information on it and to ensure that the Welsh Government were aware of that element. But then I was told that it probably would be the economy Minister or the Deputy Minister for economy who would be involved with that. So, it's a bit complicated, but I just need to make sure that the Welsh Government are aware of the national underground asset register that was added on last minute. That would have an impact also on local government.

Yes, I was just thinking of our committee angle, Carolyn.

The amount of assets that are underneath roads is huge, and it impacts on the street works part of local government.

I'm sure that's something, if committee members are content, that we can raise and try and get answers on, Carolyn. Thanks very much for that.

The next item is a motion under Standing Order 17.42 to resolve to exclude the public from the rest of this meeting. Are committee members content to do so? I see that you are. We will move to private session.