Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property118. Read the original article for full details.
Welsh First Minister Hints at Rent Controls and 20,000 New Social Homes
The Welsh government has claimed it will build 20,000 social homes by 2030 and has hinted at introducing rent controls. Speaking in the Senedd, First Minister Rhun ap Iorwerth said the government would bring in legislation to help tenants and tackle bad landlords.
The news comes as data from Rent Smart Wales reveals small landlords are leaving the private rented sector (PRS).
What the First Minister said
Mr Iorwerth told Welsh MPs that strengthening the private rented sector is a priority for the government. Renters in Wales deserve a safe, warm, secure and affordable home, he said, and should feel confident challenging poor conditions. The first phase of the legislative programme would deliver legislation that protects tenants and tackles poor landlords, making renting more secure.
Asked about the high cost of renting in Wales, the First Minister hinted at plans to look at rent controls. He said the government is determined to bring in 20,000 additional social homes by 2030, bring homes that are currently not in use back into use, and raise the quality of the housing stock.
On regulating rent increases, he said the government is actively exploring different measures and pointed to developments in Scotland and Catalonia as examples to examine. Significant steps need considerable policy development, evidence gathering, and cross-party and cross-sector engagement, he noted, which is why the government has outlined its ambition to bring forward a second renters Bill as part of a two-phase legislative approach.
Criticism of rent controls
According to the Institute of Economic Affairs (IEA), while rent controls may initially lower rents for existing tenants, they typically lead to higher rents in uncontrolled sectors and reduce housing supply and quality.
The report notes that in Scotland, the rent cap has been blamed for soaring rents, which have increased by 11.6%. Data from Hamptons reveals Scottish landlords are increasing rents at a faster pace than anywhere else in Great Britain because of rent controls reshaping the market.
Hamptons lead analyst David Fell said the evidence from Scotland suggests rent controls rarely work as intended. At best, they delay rent increases; at worst, they set a new benchmark where landlords feel compelled to increase their rents every year by the maximum allowed. Faced with uncertainty over future rules, many landlords choose to raise rents little and often rather than risk falling far below market levels.
What this means for agents and clerks
For letting agents and inventory clerks operating in Wales, the prospect of a second renters Bill and possible rent regulation measures could bring further compliance changes. With Rent Smart Wales data showing small landlords leaving the PRS, agents may also see shifts in their landlord client base as the Welsh government's legislative programme develops.
Source: Property118