Local Government and Housing Committee

Okay, we will proceed to item 2, our inquiry on the private rented sector in Wales. And I'm very pleased to welcome the Cabinet Secretary for Housing, Local Government and Planning, together with two of her officials, Sarah Rhodes, deputy director of housing policy, and Gareth Baglow, senior private sector housing policy manager. Welcome to you all. Perhaps I might begin, then, Cabinet Secretary, with initial questions, first of all on policy and vision. What is the Welsh Government's vision for the private rented sector in both the short term and the long term?

Thank you very much, Chair. It's really nice to be here this morning. So, our overarching view of the private sector is that we want a viable private sector that works in harmony with all of the other sectors in the housing market. We don't have a particular vision for how large the sector should be, but we would like the sector to provide warm, affordable, decent homes for people in compliance with the Renting Homes (Wales) Act 2016 and to work with us and Rent Smart Wales to ensure that our landlords are well informed and comply with all of the obligations on them. In the Green Paper we put out earlier this year—the call-for-evidence Green Paper—I said that very clearly and we asked for evidence. We're committed to publishing a White Paper in this Government term—it's currently scheduled for summer of this year—where we're going to explore further the two issues of the right to adequate housing and fair rents policy, which are obviously connected too to the PRS.

Thank you for that, Cabinet Secretary. Could I just ask you, in terms of the private rented sector and households who have low incomes or indeed have support needs, we've heard from several of our witnesses that they believe that long-term reliance on the private rented sector for households in those circumstances should be reduced, is that something the Welsh Government is in agreement with?

Yes. We don't have a particular target for the amount of people in the sector, but we obviously—. The PRS is only one part of the housing agenda that we have. The other major plank of our housing agenda is to build 20,000 low carbon social homes for rent—not affordable homes, there's a very big difference there—and, obviously, social homes are targeted at people on lower incomes. But, having said that, it's not always the case that that's the right home for them. So, it's about the right home for the right person in the right place. In my own constituency, for example, in the centre of Swansea, we have a large number of private rented homes that are inhabited by members of the ethnic minority sector who live in large extended families, and they're very big homes, and I think, if you asked them, they'd be telling you that they're very happy there, they have a very stable and secure community. And as long as the landlord is in compliance with all of the rules, and is providing a secure home at an affordable rent, I don't really see why the tenure makes much difference. It's the security that people want, and the affordability, and because we have the renting homes Act in place, we have given tenants much more security and, of course, we work with the landlords to make sure that the homes are at the right level for people.

More can be done. We want to very much push Leasing Scheme Wales, which I'm sure the committee has heard of. That is a very good scheme where we target it at private sector landlords. We ask them to give us, basically, the house, to allow us to give the tenants more security of tenure, and in return for that, the landlord gets reliable income all the way through the period—it has to be five-years minimum; we prefer longer—and, of course, we help them bring the house up to a better standard of energy performance certificate rating, for example. So, we have a large number of schemes of that sort that are designed to assist the sector.

We rely on the private rented sector for around—17 per cent, I think it is, of our homes are provided by the private rented sector. It would not be possible, in any short or medium term, to replace that with publicly owned housing. Even if you wanted to do that, and I don't, but even if you did want to do that, you'd be talking about a 20 to 30-year target for that. So, I think it's been very important for us to work with the landlords to make sure that they are providing decent affordable homes. And, frankly, the renting homes Act is also designed at pushing out the landlords who haven't been able to comply with that, and I make no apology for that either.

Okay. Thank you for that, Cabinet Secretary. In terms of supply—

Sorry, Chair, can I just jump in?

Yes, sure. Yes, Lee, please.

I'm not sure of the etiquette of the committee, I'm new, so tell me off if this isn't cricket. But just on the Leasing Scheme Wales, the take-up has been not as you would have hoped it was: what do you think the main barriers are, and what can be done to reduce them?

The local housing allowance is the main barrier—the housing maintenance allowance, sorry. It's about to go up for the first time. I think it's just gone up, hasn't it, at the beginning of this financial year? That's the first time in several years. Even at the old level, we managed to get 70 or so houses to come into the scheme, because there are other incentives, but at this new level we've got 200 in the pipeline now, and you can see the immediate benefit of that. Unfortunately, we don't know whether the UK Government is going to continue the uplift, or whether it's a one-off, and also they've only uplifted it to the thirtieth percentile—when the allowance was put in place, it was at the fiftieth percentile of average rent—so that would, obviously, make a huge difference as well. That makes a huge difference to people on the ground in terms of their income, but if you think about the landlord and the remuneration they're getting for their property, we're competing in a market where private sector rents have gone up a lot, and so that's quite substantially lower than what they might be able to get.

In terms of the process for applying, anecdotally I've heard it's a bit of faff, it takes quite a long time: is there room for streamlining that, do you think?

Yes, I think so. We had to get used to it ourselves. Actually, we've concentrated a lot on making sure that all the local authorities come into the scheme, because they didn't all. So, we've been working with the local authorities to make sure that they're actually willing to come in and administer the scheme. Sarah will have to remind me how many we've got at the moment.

So, we've got 17 local authorities on the scheme at the moment, but a further four have expressed interest in joining and are, one way or another, in the process of going through their own internal processes to sign up. But, certainly, we've concentrated in the first couple of years on very much, as the Minister said, getting those local authorities signed up, but also ramping up. It was always planned that we would really ramp up in terms of bringing on properties this financial year, so we've got a publicity campaign as well to try and target more landlords. Now that we've got the majority of local authorities on board, and they know and understand the process of bringing landlords on, we're really ramping up in terms of the target numbers now.

And with the ones that haven't joined, is there a reluctance about capacity, because of the extra work it generates? And if so, is there thinking about the empty homes scheme, where one local authority took a lead to provide the service for others—is that something that you've considered for this too?

Yes, and obviously I'm now the local government Minister as well, which I wasn’t before, and so it’s very high on my agenda to make sure that they all sign up. So ,I will be exploring with the ones that haven’t what exactly it is that’s stopping them. And then, frankly, for the local authorities, the local authorities are all under a lot of pressure on the homelessness front, so it’s very hard to understand why they wouldn’t sign up to this, as that alleviates the pressure there, and it is part of our empty homes scheme as well, of course, because it allows landlords who have houses that aren’t currently fit for habitation to come into the scheme and get the benefit of it. So, I think we’re going to have a big push on it. But there’s no doubt at all that the housing maintenance allowance has had a dramatic effect on it. The uplift is having a dramatic effect on it as well in terms of incentive. I will be pushing the UK Government to say as soon as possible whether this is a one-off or whether they're going to uplift it next year in line with inflation, given the inflationary pressures that we’ve had, or is this a one-off and they’re going to freeze it again? I think it’s pretty awful that they haven’t said so, actually. And then, obviously, we’re working with the shadow bench to make sure that they’ve got the right policies in place as well.

Thank you, Chair.

Okay. Yes, on supply, then, Cabinet Secretary, what is your view on the potential for build-to-rent in terms of increasing supply? And do you have any thoughts as to anything you might be able to do to encourage institutional investment in build-to-rent?

We've seen some build-to-rent. It's not huge in Wales, to be honest. It's a lot less huge than it has become in England. We have seen some build-to-rent in Cardiff. Cardiff attracts young professional people who want to be mobile and so on. Build-to-rents tend to have associated services with them, like gyms and so on, so they attract a particular market. So, that's great. For that particular market that's really excellent, but that's not a solution to the housing crisis, because most of the people in crisis are not in the market for that kind of rental property.

So, our view is that, where it fits the tenure that's demanded by the local population, fine, but we wouldn't be particularly pushing that. We have a large—. I mean, I'm not against it, either, I want to emphasise, but I don't think it's something the Government needs to incentivise in any way, because we have a large number of other things that we're doing to increase supply, and I'd certainly be prioritising those.

Okay. Another question from me on supply, Cabinet Secretary, before we move on to other matters and other members of the committee. In terms of the universities and accommodation for students, we've seen a lot of fluctuation, I think, over the years, haven't we, where there's been a lot of new build in places like Cardiff and then sometimes the numbers of students haven't matched the new accommodation that's been built, and then it has been repurposed and used for those who are not studying. So, it's been quite an interesting picture over recent times. Have you done any work to engage with universities to ensure that they're taking responsibility for planning for the accommodation needs of students?

Yes, indeed. I should say, obviously, my own constituency has an extremely large student population in it with two big universities, and we’ve had quite extensive conversations with the university local authorities as well, as with the universities themselves, about taking into account the student population when they’re projecting their housing need. Actually, I have not been terribly successful at this, but I plan to have another go. We have tried very hard to persuade some of the local authority planning departments that they have the power to enforce a better standard on the private sector-built student accommodation, so that if it isn’t being used for students, it can be easily repurposed across to social or good-quality private rented. I wouldn’t say that we’ve been particularly successful at that, though I haven’t given up in any way on that. Because, of course, the students bring vibrancy and diversity to a city, but they also bring money, and the universities know that, and most of the universities are therefore building their own tied student accommodation as fast as they can go as well. So, the cities that the universities are in have to take account of the fact that the universities themselves want the money from the students, and you can see how the market is growing there. So, we have been pushing the university cities—there aren’t that many of them in Wales—to try and take that into account in their planning policy. And as I'm the planning Minister as well, I will be going round that loop again, because the problem is—. So, if you take the centre of Swansea, which is the one I know better—so, forgive me, that's my local patch as well—there are large numbers of student blocks going up. For the students, they're great and they're in the city centre and all the rest of it, but the university is, as we speak, building huge amounts of accommodation and attracting students onto campus. You can entirely understand why they're doing that. And so, the conversation we've been having with the city is what's going to happen to those blocks.

University cities tend to have large numbers of houses in multiple occupation as well. Swansea, for example, has a density policy for that now. The density policy can help if the student accommodation is going up, but it can't roll it back. So, if you're already over the density, it can't roll it back. So, we will be looking at a number of other levers. There are levers around the exemption for students from council tax, for example, that will be interesting to look at, and I have been working with my colleague Rebecca Evans for some time on looking to see whether there are lots of unintended consequences of the council tax exemption for students, for example.

In the end, it's about having a sustainable city with a huge mix of tenures in it, all of which are multipurpose and all of which are sustainable into the long term, so they're fit for human habitation, they have the right space standards, they have the right facilities and so on. And so, trying to persuade the local authorities that they should adhere to those standards for all types of housing, even where it's specialist, is one of the main things that we're trying to persuade them of—I have to say, I can't say with any particular success so far.

Okay, Cabinet Secretary, thank you for that. Oh sorry, Altaf, yes.

In many universities, so, for instance—[Inaudible.]—their ability to buy to rent. Is there anything like that in these new buildings around Swansea?FootnoteLink

I'm not aware of any universities in Wales that have bought a property to rent to the students. Almost all of them have either retrofitted buildings they already have—so, Cardiff and Swansea universities, for example, have done quite a bit of retrofitting—or they've put up new build. And I'm not aware—. I can ask the Cabinet Secretary for Education if she's aware, but I've had long conversations with most of the universities about housing over the course of—I mean, I've been doing this job for quite a long time now—six years or so, and I've not come across—. That's not to say there isn't an instance, but I'm not aware of it if there is.

Okay, Altaf? Okay, we move on then to Lee Waters. Lee.

Thanks. So, the committee's had evidence from Shelter that a quarter of the clients they see have an issue with damp and disrepair, and even though they already have the right to redress for this under their contracts, they're either not aware of it or are frightened to use it for fear of being evicted. And a number of witnesses have talked about just the fundamental power imbalance there is between landlords and those renting. What are the thoughts on how the quality can be raised? Obviously, one way to do that is through applying the Welsh housing quality standard to the private rented sector, and do you have a timeline for when that might happen?

No, we don't have a timeline for when that might happen. For quite a long time, we thought that the UK Government was going to uplift the quality standards for the private rented sector and, unfortunately, they've reneged at the last minute on that. So, they were going to lift it up to energy performance certificate E, I believe, so they've gone back on that for reasons that I'm not entirely certain about. So, what we've been trying to do is incentivise the change through things like Leasing Scheme Wales and with the Renting Homes (Wales) Act 2016. So, the renting homes Act puts quite a large obligation on landlords now—it hasn't been in force for very long, actually—and I absolutely take the point that despite the fact that tenants have a right to ask for that service and the Act prevents any retaliatory eviction of any sort, people are afraid that that won't work. We think that as the Act embeds, and as Shelter and Crisis and other people that we fund to give out advice embed that across the sector, and we take a few test cases, we will be able to extend that across the piece.

I will be talking to local authorities. Local authorities, before the austerity period, used to have quite large private rented sector teams that did inspections, and so on. Now, they tend to be complaint driven. So, they only respond to complaints, and the threshold is quite high. So, I will be speaking to local authorities as well about what we can do to shore up the private rented sector teams inside the authorities. But they have been decimated by the austerity years, as many of those so-called back-office staff have—it turns out they're pretty essential, those back-office staff. And we fund the advice agencies and a number of charities, actually—Shelter in particular—directly to provide that kind of advice.

Sarah and her team, and Gareth and his team, monitor the courts as well to see what is coming through. I don't know if you're going to get on to the eviction things, but the numbers on evictions are really interesting, because they've dropped very substantially, after a peak, and—

Why do you think that is?

Well, because we think the renting homes Act is bedding in.

Okay.

So, the new protections are bedding in, and we had a tail-end of the previous regime going through. So, as the Act beds in, it becomes more and more difficult to evict people, the notice periods are much longer, people have more redress to advice, and so on. But we'll monitor that. Again, the Act hasn't been implemented for very long, so you would expect it to take a little while to bed right in. The Act very substantially changes the power balance between tenants and landlords in Wales, but it takes a while for that to get into your heart, doesn't it, if you're in that position. So, we do think it will improve.

And then, one of the other things we're doing of course is trying to lift the people in the worst housing, who would be eligible for social housing, out of that. And then, again, as usual, Leasing Scheme Wales comes in. So, where we are aware that a landlord is struggling perhaps to do the repairs, offering the leasing scheme to try and get that house up to standard. There's a lot of anecdotal evidence around—maybe the committee's going to ask me about this—about landlords coming out of the sector. That's not borne out by our stats. So, the registration of both landlords and properties has gone up. There was a dip at five years, because it's a five-year registration cycle, so, as people didn't renew, there was a dip, but it's grown very steadily ever since.

But is there churn within that?

Well, yes, a bit, but not as much as you'd expect. The figures are quite interesting, aren't they?

Yes, absolutely. And I think it's about whether or not landlords are selling up and then selling to other landlords, so, actually, it's not been lost to the rented sector, it's just changing hands.

So, we've got the stats on the number of landlords, but also the number of properties, and that's an interesting correlation as well.

Okay. In terms of the call to the UK Government on the EPC, is this something you'll keep pressing?

Yes.

Okay. You mentioned incentives for current tenants to improve the quality themselves. What sort of consideration is there of ways of drawing in private finance—possibly a scheme that the Development Bank of Wales has, I know you've considered it on renewable energy, and so on—to extend it into allowing people to make improvements like this?

So, we're very keen to make sure that tenants can take advantage of any of the schemes that we have—the Warm Homes scheme, for example—and we advertise that to both landlords and tenants. The Warm Homes scheme improves the energy efficiency of the home, so, actually, directly benefits the tenant, although of course it increases the value of the property as well. So, it is a matter for both of them. So, we encourage that, of course. We also encourage a dialogue between the tenant and the landlord about the split of benefits there. And in extreme cases, actually, the Act would allow you to withhold your rent if you weren't getting the service you wanted. But if you feel as a tenant that there's a power imbalance, withholding your rent is a pretty draconic thing to do, and quite scary. So, I wouldn't have thought that very many people would actually do that.

So, the answer is that there's a range of things that we can do. We can allow private finance access. We allow the Government's Warm Homes programme access, for example—it's tenure-blind in that sense. And we encourage, through Leasing Scheme Wales, the upgrade of the overall fabric of the house. We haven't had a conversation that I'm aware of—unless Sarah tells me differently—about extending the Welsh housing quality standard to the private rented sector.

No. I think what we're keen to do is take the learning from actually rolling out WHQS across—there are 230,000 social homes in Wales—taking what we learn from that and how we can apply that learning then to the 1.2 million privately owned homes. So, it's already a mammoth task in terms of the social sector, so what can we learn in taking that to the private sector as well?

And also, part of the WHQS—it's what we did for the first iteration of it as well—it's an economic development opportunity too. So, we overskill the workforce, making a market for the private rented sector and for homes in private ownership. Because, actually, you have to have the skilled workforce to be able to do the upgrades, and I know to my cost, having tried many times in my own home, that it's quite hard to find those. So, part of our task in the WHQS—because the registered social landlords and the stock-holding councils use a range of private sector contractors to do the upgrades—is to make sure that those contracts include an overskilling and an apprenticeship programme, so that we're producing more than we need for the social sector.

So, another option that's come up in the evidence is the idea of audits, either a compulsory survey before a landlord puts a property on the market or a self-audit tool that could potentially be administered through Rent Smart Wales. Have you given consideration to either of those?

Well, I mean, we sort of do that. They have to comply with the renting homes Act. Effectively, when you go through the training to become a landlord on Rent Smart Wales, you are effectively doing that; you are saying, 'I have done the training, I understand my obligation, the home I'm renting is fit for purpose', and then we do spot-checks. I mean, there's no conceivable way we will have the resource to check every single home, but they do spot-checks, for sure, and it's a complaint-driven system as well.

But do they cover the quality of the property and the state of its maintenance?

Yes. So, the renting homes Act includes all of the things that you'd expect as fit for human habitation. So, they have to have electrical certificates, carbon monoxide, water quality—you know, all of that stuff. So, it's all of the stuff. I mean, it isn't, you know, 'I don't like the wallpaper', but it is, 'Is there running damp on the wall?' It's not a quality standard in the sense of aesthetics, but it is in terms of—. Fit for human habitation comes with quite a raft of things that the landlord has to comply with. But there's no way, there's no point in pretending, that we will ever have the resource to go out and check every single home. But, effectively, the landlords are self-certifying by—. It's compulsory; we don't give them a choice. So, you have to go through the Rent Smart Wales training programme in order to register, and that is aimed at making you understand what a home that's fit for human habitation is.

One of the other issues that came up—

Lee, just before you go on, just quickly—Altaf.

Yes. I want to ask about this—it's a great term—property MOT. So, will it be happening every year or will it depend when you're changing tenants or—?

I'm really happy to explore things like a property MOT and stuff, but, for us, it's always about whether that—. Does that add sufficient clarity for the tenant, and is it enforceable? So, this point that has been made to me today about, 'Does the tenant feel empowered?', it doesn't matter what you add in, if the tenant doesn't feel empowered to enforce it, then it won't work. So, we have to work with organisations, as we bed in the renting homes Act, to make sure that tenants do feel in a better position to enforce their rights. The Act has a prohibition on retaliatory eviction, so if a landlord does try to evict somebody from the property and they're able to show that they've asked for a service that the landlord hasn't provided, then the landlord isn't able to issue that eviction notice for another six months—. I can't remember how long it is. There's a long period of time—

A year.

A year. Is it a year? There's a long period of time in which they are then prohibited from evicting the tenant because they've indulged in this practice, so it's pretty draconic. So, we just need to get the tenants to understand their rights enough to enforce them. I'm not against having a property MOT as such, but would be keen to know how that would add to the security of the tenant, really.

Okay. Thanks, Altaf. Lee.

So, just on that point, there's evidence the committee's had about the financial impact on tenants who are then forced to move, either because the landlord has decided to sell or they want to exercise their other rights, and it's something about a £1,700 average cost to a tenant for having to move. And there's some suggestion that there could be a requirement to waive two months' rent in those circumstances, where they are moved without their consent. Is that something that is attractive?

I mean, it's certainly something we could look at. I am very keen to make sure that the Act embeds properly. We don't yet have all of the stats; it just hasn't been in place long enough, really. So, in Wales, tenants have the most protection from eviction of any nation of the UK.

This business about whether no-fault eviction exists or doesn't exist I find quite infuriating, actually. No-fault eviction exists in all of the countries of the UK, because if a landlord sells the house because they want to and you have to move, you haven't done anything wrong. You have to move—that's a no-fault eviction. If the landlord wants to have the property back for their own use, the tenant has to move—that's a no-fault eviction. There are large numbers of grounds on which a landlord in England and Scotland can take possession of the house that are no-fault evictions, and actually the protection for that tenant, in terms of notice periods and so on, is much less than it is in Wales.

In Wales, the renting homes Act gives you six months straight, and then six months’ notice, so a new tenant has a year minimum. And then there’s a six-month rolling period after that. That's the longest of anywhere in the UK. The reason for that is to make sure that the tenant can move in good order and in the neighbourhood. It's hugely disruptive to children and so on. So, it’s to give you the maximum amount of time to find somewhere locally.

We're going to take some homelessness legislation through the Senedd and we're going to marry up the duty of the local authority to help with housing and the notice periods, because at the moment they don't marry up. At the moment, the local authority has 56 days. So, it doesn't match. It will match once we've got that through. And we are working actively with local authorities to speak with families the minute they know that they're going to be in that position, because many landlords give them much more than six months’ notice, because they are in an unfortunate position but actually want to be doing that. So, it is about trying to make sure that the local authority will work with that family as fast as possible to make sure that they have somewhere to go. So, that's the direction of travel for us.

If we find, after a couple of years of the renting homes Act, that that's not having the effect we wanted, then certainly we'd be looking to see what else we can do. But so far, the eviction numbers are dropping rapidly, and we hope that it is having the effect we wanted. Do you want to add something?

Yes. Just to add as well, we've already put in place some evaluation work in terms of renting homes so that we can evaluate as we're going along. We've got that piece of work in place at the moment, so we can learn as the Act is embedding.

And then, just finally, in terms of the scenario where a landlord sells, there's evidence we've had about sitting tenants wanting to be given the ability to buy that, or, potentially, I suppose, through the leasing scheme, the local authority, and they could stay there in that way. What practical positive incentives could enable this?

We already enable that. I have to say, I've got three examples in my own patch where a family has approached us for help, and I've actually managed to get the local authority or a local RSL to buy with them in situ. We say that all the time, Shelter gives that information out all the time. If the landlord needs to sell the property, then you can approach the local council or the RSL. We'll help with that and we incentivise the RSLs to buy with people in situ. We've allowed that for quite some time now.

And they're consistently doing that across Wales, are they?

Well, 'no' is the answer to that, but we've been working with them to make sure that that opportunity is there. One of the things the homelessness Bill is going to do, and this is why we're doing the homelessness Bill, is—. The way that the allocations policy works and the way that the incentive for an RSL to do that works isn't right, and we'll be able to correct that in the Bill. But it is happening across Wales, and I have examples in my own patch of it happening.

Thank you.

Thank you. We move on to Altaf Hussain.

It's a joy to see you, Minister, this morning.

You too.

My area of questioning is affordability. [Interruption.] [Laughter.] Since the COVID pandemic, there has been an increase in the rents being charged in Wales, and we've heard that some tenants are being asked for large deposits and multiple months' rent upfront, which is leading some into unmanageable debt. Does the Cabinet Secretary agree that there's a need to regulate a maximum deposit and rent in advance?

We put a Green Paper out earlier in the year, a call for evidence on both the right to adequate housing and rent control policies, which is what you're talking about there. That will be followed by a White Paper in the summer—is that what we're saying—of this year. Hopefully, before the end of the summer term, but in the summer anyway, we'll put the White Paper out, in order to properly consult on views right across the piece on how best to control things like deposit amounts and rental increases and so on. There are a number of things that that will look at—all the things you’ve mentioned there, Altaf, will certainly be part of that. But there are other things as well—things like asking people for guarantors. It’s very common now, unfortunately, in the rental sector, to be asked for a guarantor. So, if you’re somebody who doesn’t have a family background and doesn’t have somebody to do that, it can be very difficult to do. We’ve enabled councils across Wales to provide guarantees for people in that circumstance. We started doing that as part of the Homes for Ukraine scheme, but we’ve been able to do that, so that, where a renter has a deposit, but doesn’t have a guarantee for the rent and the rent is high, the council can provide that kind of guarantee.81

It is incredibly expensive for somebody to be homeless. Almost anything you do to make sure that somebody stays in their home and doesn’t become homeless is cheaper than them becoming homeless. So, we’ve been looking at a range of interventions around rent relief, loan schemes, enabling the credit unions to help out—a whole series of things. For social tenants, we have an agreement with all of the social home providers in Wales, both councils and RSLs, that there’s no eviction into homelessness—for rent arrears, or for any other reason—and they will work with the tenant to make sure that an arrangement can be made to recover the rent over a very long period of time, or to write it off in certain circumstances and so on. So, we work very hard to make sure that that isn’t happening. It’s harder in the private rented sector, but we are helping the councils to step up to that, because, as I say, as soon as that person becomes homeless, the human cost of that is horrendous, but the financial cost of it is also horrendous.

It's great to know that, Cabinet Secretary. What is the Cabinet Secretary’s view of the rent control proposals introduced in the housing Bill in Scotland? What is the Welsh Government’s current thinking about rent regulation in Wales?

It hasn’t really worked in Scotland, I’m afraid. We’ve got some evidence, although it’s early days for them, to be fair, so we’ll want to monitor that for a longer time period. But, so far, the evidence is that it’s not having the desired effect. It is one of the things we took into account when we put the call for evidence out in the Green Paper, and we’ll certainly be referencing the Scotland proposals in the White Paper that comes out later this year. We’re very keen to look at international examples from all over the place in terms of what works to get affordable rents into the sector. So, yes, we will be monitoring it closely. But early indications are that it hasn’t quite had the effect that they were hoping for.

Thank you very much. And my last question is this: why did the Renting Homes (Wales) Act 2016 get rid of new contract holders’ ability to apply to the rent assessment committee? Does the Cabinet Secretary agree that tenants need greater protection against extreme rent rises that are significantly above market levels?

We think that that wasn’t used very much at all—very rarely. We had about six applications a year, so it was not very effective, really. And the applications could only be made where the tenancy agreement did not include a rent increase term. So, all new renting homes contracts include a rent increase term, which is what the Law Commission recommended us to do as part of the Act. So, it wouldn’t apply anyway in the old circumstances. But where a previous tenancy has converted to an occupation contract under the Act, then the ability to apply has been preserved for those contracts only. So, it will tail off, but there are a small number of people who still have the ability. But we don’t think it was very effective, really, in what it was doing.

It’s great to know that. Thank you.

Thank you, Altaf. A few more questions from me, Cabinet Secretary. Firstly, in terms of challenges that landlords face, do you believe that the land transaction tax is charged to private landlords at fair levels, and do you see any potential for tax changes to increase landlord investment?

LTT is in Rebecca’s portfolio, not mine, but, obviously, I have long conversations with her about it all the time. There are three sets of rates—I’m sure the committee knows this already: the main residential rate, the higher residential rate for additional properties, and the non-residential rates. That's very much part of our push to regularise the preponderance of second homes and holiday lets in various parts of Wales, as you know—I'm sure the committee knows this. We're talking here about the difficulty once you're in a rented property, but, actually, finding a rented property in very large parts of Wales is a task in itself.

There's currently a live consultation regarding proposed amendments. I'm sure the committee knows this already, or I hope you do. The question is: 'With the Welsh Government's aims and objectives in mind, are there other LTT rules, including reliefs, which you feel should be considered for review, for instance to support the Welsh Government's housing commitments?' So, that's very definitely directed at the private rented sector. I guess the proposal would be that if you can demonstrate that you're buying a house to put it into the long-term private rented sector, then you might consider that there's an LTT reduction that might be available. But that's a live consultation at the moment.

We're doing a number of things, actually, to try and incentivise people to come out of the tourist market and into the long-term private rented sector in various parts of Wales. The Government has a number of commitments. The Cabinet Secretary for economy and the Cabinet Secretary for finance have responsibility for two of those measures—I don't know if the committee is planning to take evidence from them. But they're effectively the registration and licensing scheme for tourist accommodation, which would level the playing field, because, at the moment, if you rent out your property for tourist accommodation, you don't have to comply with anything at all, which seems extraordinary to me. I'm forever telling my children that if they have an Airbnb, don't fall down because there's no insurance and don't plug the kettle in because it hasn't been tested. It seems extraordinary to me that that's the case.

We think that accommodation provided of that sort should be of the same level, and we think that the people who provide that accommodation should be fit and proper people to do it. So, there will be a consultation about that going out. But it's in the portfolio of my colleague the Cabinet Secretary for economy. And, then, the tourist levy is in the portfolio of the finance Minister. All of these have an effect on the supply of housing across Wales; that's why I'm mentioning them. It's a very complex set of levers that we have to try and increase the supply in areas where there's a very serious shortage.

Cabinet Secretary, thank you for that. On partnership working between social and private landlords, do you believe more should be done to ensure private landlords are able to refer tenants to housing support grant services where they are needed?

Housing support grant is tenure neutral. It's provided to everyone who needs it regardless of their tenure and it's available to all individuals at risk of homelessness regardless of where they are—whether they're in the PRS or anywhere else. The whole purpose of HSG is to prevent homelessness and to support people to make sure that they can maintain their accommodation of whatever tenure it is. We ask the local authorities to promote the awareness of those services, and, so, they're engaging with stakeholders, including the PRS. We also put information out through all of our other outlets as well; Rent Smart Wales carries information for landlords on how to refer tenants who are struggling. The helpline for Rent Smart Wales will assist a landlord to do that. And, of course—as I've said a couple of times already—we support Shelter to provide advice and help services. Actually, we ask all of the Members of the Senedd who write in to me very regularly on this to contact Shelter to make sure that they're getting the right support for anybody who's contacted them who's got that difficulty. So, I think it is really important to understand that that's completely tenure neutral. Those services are provided to everyone who needs them.

Promoting awareness is very important, because there's going to be a big difference between a social housing provider in terms of their resource and capacity and at least some private landlords. Do we have any sense of to what extent private landlords are making these referrals? Do we have any sense of what the need is?

I can tell you anecdotally that I've been contacted by a number of landlords concerned for their tenant who want to refer them on to services. I think a very large number of the landlords in Wales are actually perfectly lovely people who are trying to provide a decent home for somebody. The whole purpose of this legislation is to encourage them and drive out anyone who isn't of that sort. So, I certainly have received letters off a number of landlords asking how to help a tenant who is in difficulty, but I don't know that I've got any empirical evidence of the number of those, I'm afraid.

No. Okay. Could you provide an update, Cabinet Secretary, on the review of the transitional accommodation capital programme planned for this financial year?

Yes. So, we're just running into the second year of the programme. We've been doing some analysis of the first year schemes and their effectiveness, and so on. We've asked for an expression of interest to gauge appetite for the schemes, and that exceeded the budget available by a really quite scary amount.

By what, sorry?

The expressions of interest we've had are way over the budget that we've got. So, it's clearly a very popular programme and people want to be part of it. So, we're just in the process of working with the sector on that. Sarah, do you want to add to that?

Yes. So, just to add, in the second year, if you like, which we're in at the moment, what we're looking at currently is whether or not we can identify budget, moving forward. It has been extremely successful, and I think the flexibility that it provides all our partners has been really welcomed. So, we're looking at the moment in terms of how can we ensure that we can take the programme forward into a third year. But, I think it's important to flag with the committee that there isn't a separate budget line for TACP. So, it's very much looking at how we can look across our existing budgets to identify resources to assist in a third year of the programme.

It's the classic dilemma: we want to build as many permanent houses as we can, but we've got problems with building the permanent houses in some parts of Wales. Committee will be very familiar with some of those, such as the phosphate difficulties that we've had, although we've managed to unlock some of those in the north. I know Jack knows about that. And, in your area, Chair, we've managed to unlock some of it, in Newport. But, in other areas of Wales, we've not been as successful in unlocking some of those sites. So, we have a number of housing sites locked behind those kinds of difficulties.

We work right down to individual site level with people to understand what the supply looks like, going forward, and that's clearly the optimal way to do it, but we have a large number of people in not-very-good temporary accommodation. We have quite a lot of people in quite decent temporary accommodation, but we have a large number of people in not-very-good temporary accommodation. So, what we've been trying to do is accelerate their removal to much better temporary accommodation, some of which is actually lovely. I've visited some of it. I don't know if you've been to the Gasworks site, but it's really quite something. It's worth a trip to see, because that is temporary accommodation, but it is impressive. And what we've been doing is working with the authorities to make sure that they have a pipeline of schemes ready to go, because, as funds become available across the Government as other schemes slip and capital funding becomes available, as it always does in Government programmes, we're ready and willing to mop it up, effectively. I'm always saying, 'I'll have it. I'll have it.' So, we like to have the schemes shovel-ready and waiting to go, and the idea is to have a nice mix of swift moving into decent accommodation, preferably in the right area.

The Gasworks site is a very good example of that, where we have really excellent temporary accommodation. It's modular, it can be moved onto the site, and then, as that site builds out its permanent housing, those people are actually moving into the permanent housing, and that modular housing can be picked up and put down on another site, because the whole site isn't built out at once. So, if you've got a site of—I can't remember what the Gasworks is—about 500 houses, as they're built out, we can move the modular accommodation down the site and then take it away and put it on the next site where that's happening. It's really clever. The committee should go and have a look at it if you have the option.

Okay. Thank you for that, Cabinet Secretary. Just in terms of some of the evidence that we've received, there has been a suggestion that many private landlords would be receptive to a duty on private landlords to refer tenants at risk of homelessness to local authorities. Is this something that was considered for the 'Ending Homelessness in Wales' White Paper?

So, we haven't included a proposal for private landlords to be placed under a duty to refer. The duty to refer is for bodies and organisations; it's not proposed as a duty that applies to an individual profession or a private citizen, which is what landlords are. In the White Paper, we set out a practice to improve the ability of landlords to make local authorities aware of tenancies at risk, so that's where we're going with it. So, Gareth has been working on how we can make sure that landlords registered with Rent Smart Wales basically make us aware immediately that a tenancy is at risk for whatever reason, and those might be the sorts of issues we've already talked about—the landlord wants the house back. But, actually, it might be something like the landlord is really struggling with their tenant and the tenant is not paying their rent, and they're experiencing anti-social behaviour. We want to be told about those instances as well, because that person might require support and assistance, hopefully to maintain the tenancy, but, if not, to be picked up by the services as appropriate. So, that's where we've been going with that. Gareth, I don't know if you want to add anything.

Yes. Rent Smart Wales also have a page for each local authority area for private landlords, which shows all of the support services available in those areas as well. So, as well as actively going out there and telling landlords about it, there are resources available on their website as well.

And I understand that, in England, the right to refer already exists, but the private landlords are not subject to it, and I'm told by the officials—I don't know which one of you knows more about this—that the Scottish proposals aren't proposing to subject private landlords to the 'ask-and-act duty', as they call it, either. I think that's because of the difficulty of imposing that kind of duty on a private individual.

Yes, okay. Thank you for that, Cabinet Secretary. Jack Sargeant.

Diolch, Cadeirydd. Good morning, pawb. In the previous Senedd, Chair, I spent an evening in Chester—I've spent many an evening in Chester, but I spent this particular evening in Chester raising money for a local homeless charity and, albeit across the border, they are the same issues that we see here in Wales as well. So, I slept rough that evening and I met an individual who is homeless. He had a pet dog, and from having a conversation with him on what are the reasons he's homeless, they are the same issues that we see here. He was faced with the dilemma of getting a place to stay and having accommodation, but, in doing so, he'd have to give up his companion, his dog. That spurred me on to do some work with some charities—animal welfare, homelessness—and landlords associations as well. We called for what we termed then, Chair, 'pet-friendly paw-licies'. Now, I'm conscious that the name isn't great, but the idea around it is. And I understand, Chair, that we've heard some evidence from the Dog's Trust in particular, where they've done a survey and statistics show that 52 per cent of households have a pet—I think it's one in three with dogs—but only 8 per cent of renters in Wales say that their home was advertised as being pet friendly. And I believe that the committee has also heard evidence that the current legislation doesn't go far enough with regard to promoting pet-friendly policies. Can I ask why the Welsh Government hasn't requested provisions for pets in the Renters (Reform) Bill for Wales?

We weren't given the opportunity to do so, basically. So, we weren't asked to pick and choose which bits of the Bill we'd like to have applied to us. An offer was made to us to be involved in the no-benefits-claimants and no-children exclusions, and so we've accepted that offer. We weren't given a kind of smorgasbord of what we would like or not in the Bill. And we've got statutory guidance in place, as you know, that landlords can't unreasonably refuse the right to have a pet and so on. I'm, actually, really interested in knowing whether we can extend that.

We've worked pretty hard with some of the temporary accommodation providers to make sure that pets, and dogs in particular, can come, because you're absolutely right, Jack—I've met many a homeless person whose dog is a huge comfort to them, and we absolutely do not want them to not come into services because of their dogs. So, we have a large number of provisions across Wales that do allow you to bring your dog with you, and I'm very interested in working with you on how we can extend pet rights, if you like, to contracts. It can be quite difficult in high-rise buildings, for example, and so on, so it is about trying to find the right contract clause that allows the right kind of pet. I shouldn't share anecdotes with the committee, but, a long time ago, when I worked for the City and County of Swansea, I was asked to go with a tenant to see something that was happening in a high-rise flat in Swansea, because the lift kept breaking, and we took an engineer with us, and the lift kept breaking because people on the seventh floor were keeping a horse in their kitchen, and this horse was relieving itself in the lift on the way down and it was breaking the mechanism. It was quite something to see this horse in this kitchen, I have to say. [Laughter.] So, I do think you might have to have some controls around the suitability of the pet—not to say that most people would do that, but I thought I'd share that anecdote with you.

Well, Chair, I'm not often silent—[Laughter.]—but the Minister has stunned me this morning. I'm grateful for the Minister's response and recognition to the importance of the pet-friendly policies there. It's a shame, really, that the UK Government haven't given Wales the option to do that in the reform Bill.

The other problem with the Renters (Reform) Bill as I see it is the continued delays to the Bill. I just looked—if you bear with me for a second, Minister—at a quick Google search this morning about the renters Bill. I have two BBC headlines in front of me, one saying the housing Secretary Michael Gove promises the Bill will go through and all the points of the Bill will be in law before the next election. That was just on 11 February. There's an article from the BBC nine hours ago saying that that might not be the case now, and it seems to pin it on the House of Lords, and I'll say, Chair, if I can find it, his wording, because I think it's quite important to repeat it for the committee. He couldn't repeat his promise of the Bill coming forward before the next general election. He says, and I quote,

'Everything depends on the House of Lords.'

So, if this doesn't go to plan—we've seen time and time again these continued delays—does the Welsh Government have a plan B to tackle landlord discrimination, as it hoped to in this Bill?

We have absolutely no power to make sure that the Bills go through, obviously, in the UK Parliament; it's not a matter for us. I'm told that this is apparently going to Report Stage later today, so it's still progressing. I'm actually concerned about this one and the leasehold reform Bill, and that's a huge Bill that's going through, and it's got quite a lot of amendments. I'm beginning to be very nervous that that's not going to make it through before a general election is called.

I'm sure you know that the UK Parliament has a wash-up where things that aren't controversial can be agreed even after the calling of the election, but I very much doubt that any of this would fall into that category. It remains to be seen. So, what we'll have to do is we'll have to see how far we get with it, and then there are a number of things that we may or may not be able to incorporate into our programme; it's very difficult to do. We have a homelessness Bill and we have a building maintenance Bill—I can't remember what it's called; building safety and maintenance Bill—and it may be possible to put some of the leasehold reform stuff into that one, because we're looking at how high-rises are done and it may be possible to do something in our White Paper, Jack, on this, if it doesn't go through. But, in all honesty, we've got two years left of the legislative programme, and the possibility of bringing a large Bill through to replicate this is slim to none.

Thanks, Cabinet Secretary. Is the Welsh Government therefore having conversations with the shadow Cabinet in anticipation of a general election, which I think is needed, and a change of Government?

Yes. So, we absolutely are. Because of the imminence of a general election, it's perfectly proper for the civil service to be able to brief the opposition as well, and we've asked for factual briefs on a number of points to share with both parties, actually, for manifesto commitments, and I personally have had a number of conversations with shadow Cabinet members as well as endless conversations with Mr Gove about what we'd like to see in forthcoming legislation.

Thank you. Just before I move on to the regulation sector, I should support your comments on the leasehold reform Bill. Chair, the Petitions Committee will be reporting in the coming months on our inquiry, and I know Hefin David's been quite vocal on that, and he gave some evidence, so we'd be keen to see that progress as well, Chair.

Moving on, then, to the regulation of the private sector, you spoke a bit about this in previous answers to colleagues on the committee, but where health and safety standards fall short in the sector, what action is the Government taking to make sure those are enforced, particularly around, perhaps, supporting the recruitment of environmental health professionals?

The PRS, as I said, is a matter for local authorities, and they do that through their environmental health departments. It is absolutely a matter of fact that the private rented sector teams in local authorities were decimated during the austerity years. As I said before, it still makes me cross, if I'm honest, that there was a lot of talk, if you remember, about back-office staff. Well, those back-office staff turned out to be these people, planners and other people who, actually, are absolutely essential to the economy and the running of very large sectors. Yes, anyway, it's just heartbreaking that those services were dismantled in that way.

Nevertheless, we have a memorandum of understanding in place between local authorities and Rent Smart Wales. Rent Smart Wales investigate all reports of non-compliance to them using the environmental health departments of the local authorities, and those reports involve a whole series of things: disrepair, illegal action, illegal eviction, harassment, discrimination. We have the race awareness guidance in place, so that happens, but it's a complaints-driven process; it's not a proactive inspection regime, because the resource for that is not available.

Thank you. I would agree—the level of resource local authorities now have due to the severe nature of cuts and of funding and other areas is detrimental, and it does have the impact that we're seeing today. Would you also agree it's not just the level of resource? We've had local authority witnesses say they don't have enough power, particularly around preventing rogue landlords who are persistently and deliberately renting properties that are not up to the standard we expect?

We can't stop anyone from owning property—I can't do that—but we can stop them from being the landlord and being the managing agent and being the renting person. So, where somebody has been convicted of a range of offences and those convictions are unspent, then they have to use an agent that's properly qualified and fit for purpose and so on. They can have their licence application refused or revoked in those circumstances, and so they have to use a managing agent of some sort. I can think of a couple in my own patch who I'm very familiar with who now use managing agents for that. The local authority could, in fact, actually compulsorily purchase a property in certain circumstances, and, as I said before, we have for a long time since enabled local authorities to buy properties that are tenanted in various circumstances. So, all of those other levers are also available, but we can't prohibit somebody from owning a property. That's not—.

Okay. Thank you. I'll move on to just a question around data. Would you be able to give us an update on the business case for the annual survey on housing and housing conditions, and is there a particular timeline that the Welsh Government is working to?

We absolutely agree—we need a sound evidence base and a full understanding of what we're looking at in the housing market and households in Wales. Just to be absolutely clear, we have no intention of doing an annual housing survey. The resource to do that would be extraordinary, and I'm not even sure that the amount of change each year would be worth the resource necessary. The most recent Welsh housing condition survey was done in 2017-18, and we inspected 2,500 or so properties across Wales over a nine-month period. The whole work programme was over five years and it cost £2 million, so it's quite a resource-intensive thing. But we link up with all of the other data sources that we have, and, actually, as part of the Welsh housing quality standard, we've asked all of the social landlords in Wales to do a housing stock survey over three years—is that right, Sarah? I think it's three years. I'll check that for you. Yes, I think it is three years, so that's 230,000-odd social homes, and we have a number of other data sources that we link up to do that. But I think, frankly, with the sheer resource-intensive nature of an annual survey, there's an opportunity cost associated with that and it's hard to justify, I think, given the likely change, on an annual rolling basis, in the data.

Okay. Thanks for that clarification. Chair, just one final question?

Yes, certainly, Jack. Carry on.

Thank you, Chair. I'm just interested in the Minister's encouragement to visit modular builds, for the committee to go and see those in action. I'm very interested in modular homes and not only how they might address the challenges that we have in the housing sector at the moment. Do you also agree that this is an opportunity to really be a key driver in the Welsh economy?

Absolutely. The whole modular homes market is one that we've been encouraging for some considerable period of time. It's the fastest way to build low-carbon housing that there is. It's adaptable, it means you can get a much more diverse workforce in the construction sector, because the homes are constructed in reasonable conditions at ground level, in factories that can be properly—. You know, you're not working at height. I've actually had the real pleasure of watching them be put on a couple of sites, and the speed with which they go up is extraordinary.

One of the great privileges of my job is meeting people all around Wales who are then living in one of those houses, and it's just extraordinary to see the pleasure that people get from living in a really lovely, affordable, low-carbon, energy-efficient home. I've told the committee this story, I think, probably, before, but one of my best memories is when I went to visit a housing project in Bridgend. We arrived, we had media with us and all the rest of it, because people had just moved into these very beautiful, low-carbon homes, and one of the tenants had been kind enough to say that we could go inside. So, we knocked on the door and they said, 'Don't come now, come back later', so we were a bit befuddled by this and we went off and did some interviews and then we came back—I can't remember what it was—10 or 15 minutes later, as requested, and we were shown in and he was very hospitable, and we realised that we were asked back because he and his partner were sitting at the kitchen table, as they did at that point every day, to watch their energy meter switch from use of energy into feeding energy into the grid and the amount of money that they were getting. [Laughter.] They wanted me to experience this moment with them. So, it was great, and for people, really, honestly, it's transformational in their lives. They were telling us that, in that particular home, their annual energy bill was £18 and so their income was just so much easier to manage and their health had improved. It's just great to watch. So, I am a huge fan of that.

What we need to do, Jack, though, is to continue to work with our registered social landlords and our councils in the building of the social homes to make sure that there's a proper pipeline of supply, because we have had a couple of real problems—the demand side isn't there. And then I've been very heavily encouraging, with the change in the building regs, the volume house builders and SME companies around Wales to go to modular builds instead of the more traditional methods, because of the economic development opportunity, and just because the houses are so much nicer, to be honest. So, I couldn't agree more.

Thank you. I'll leave it there, Chair.

Okay. Thank you, Jack. Altaf.

Yes. It's great to know that. It's a great ray of hope. And, as a clinician, I'd be interested in using it for the NHS—it will reduce A&E waits, it will reduce the waiting lists, it will reduce the care home problems and it will reduce the bedblock syndrome. So, I will look forward to it.

Yes, I think that's right. I think it's got real potential for step-up, step-down accommodation, as well. And we've got the—. We've changed the name, apologies, Chair. Sorry, say it again—

The housing with care fund.

The housing with care fund. We've changed the name of the fund in order to befuddle the Cabinet Secretary and it's certainly worked. It used to be called the HLF, but now it's called the housing with care fund—I must try and get my head around that. That is exactly what that fund is aimed at—it's aimed at building decent facilities, not just residential accommodation, but with residential accommodation, for people who can be brought back to Wales and back into their communities because they've got out-of-country placements. I've visited a number of children's homes where we've been able to bring people back, and it's a hugely good move for them and their families. It's much more local to them. But also, actually, it's much cheaper to do it that way. So, it makes a lot of sense. Then, we've also got good step-up, step-down facilities around some of the trauma hospitals also driven by that fund, built on the same principle, Altaf, so you're absolutely right.

Thanks, Chair.

Okay, thank you very much, Cabinet Secretary, and thank you to your officials, for coming before committee this morning to give evidence on these important matters relating to the private rented sector.

Pleasure.

You will be sent a transcript in the usual way to check for accuracy. Diolch yn fawr.

Diolch.