Housing: Act 1

25 March 2014

Article by Jonathan Baxter, National Assembly for Wales Research Service

Wales is a step closer to having its first ever Housing Act. The Assembly committee scrutinising the Housing (Wales) Bill published its Stage 1 report on Friday (21 March) and, while supporting the general principles of the Bill, made a number of recommendations that could bring changes to the Welsh Government’s flagship piece of housing legislation.

The Bill focuses on two main areas: reform of the private rented sector and changes to homelessness legislation.

Image from Google by Gary Reggae. Licensed under Creative Commons

Image from Google by Gary Reggae. Licensed under the Creative Commons

Part 1 of the Bill proposes increased regulation of the private rented sector in Wales. If the Assembly agrees to the Welsh Government’s proposals, all landlords and agents will need to be registered, and if they manage a property themselves they will also have to be licensed. Becoming licensed will involve passing a fit and proper person test and taking an approved training course (possibly on-line).   The Committee recommended that there should additionally be a requirement for continuous professional development.

The Bill proposes Rent Stopping Orders as one means of enforcing the legislation; this would mean the tenant would not have to pay rent if the landlord or agent is not licensed. A number of witnesses that gave evidence to the Committee felt that this could put tenants at risk of retaliatory eviction, or even unlawful eviction, so recommended that it be replaced with a power for tenants to apply for a rent repayment order – a power already used in relation to unlicensed houses in multiple occupation. The Committee also recommended that landlords be prevented from serving a no-fault eviction notice on their tenant if they have not registered.

Licences will include a condition that landlords and agents must adhere to a Code of Practice that will be developed by the Welsh Government in consultation with stakeholders (landlords, agents and tenants). The Committee raised a number of concerns about the proposed Code, and suggested that it should contain requirements for periodic electrical inspections, and a requirement to install carbon monoxide detectors, rather than focusing purely on management standards.

The Welsh Government estimates that there are anywhere between 70,000 and 130,000 landlords in Wales, and with more than 1 in 6 people renting their home from a private landlord, that means a quarter of the Welsh population will be affected in some way by the proposals in Part 1 of the Bill.

Landlord registration is not a new concept in the UK, with Scotland having had a scheme in place for some time, and the Welsh scheme is largely based upon the existing voluntary Landlord Accreditation Wales scheme which has over 2,000 members.

Will this Bill stop Rachmanism? Well, the Welsh Government and the majority of witnesses that gave evidence to the Committee certainly think it will go a long way towards it. Support was not universal though, with one landlord association suggesting the proposals are bureaucratic, costly for tenants and ineffective.

Part 2 of the Bill will bring forward reforms to homelessness legislation. Current legislation is largely based on duties introduced by the Callaghan government in 1977. Not all of those duties are being abandoned, but the Bill places a new emphasis on preventing homelessness and, as now, local authorities will have a duty to secure accommodation for certain groups of applicant considered to be in priority need. The Committee called on the Welsh Government to report back to it on the feasibility of phasing out priority need status over time. However, those applicants not in priority need under the Bill will have access to more substantial help than at present thanks to a new duty to “help to secure” accommodation.  The Committee called for clarification of what factors a local authority will be able to take into consideration when discharging this duty.

The Bill sees Wales take the first steps to abandoning the concept of “intentionality” when dealing with homelessness, as local authorities will be able to disregard intentionality in certain cases. One of the most controversial aspects of the Bill is removing the automatic priority need status of prisoners, a move opposed by many third sector organisations although broadly supported by local authorities.  A majority of Committee members were “concerned” at the proposal.

Local authorities will be able to discharge their duties to applicants in priority need into the private rented sector with a tenancy of at least 6 months, something that can only happen at present with the consent of the applicant. This change was supported by many local authorities who saw it as a way to deal with the shortage of social housing. However, the majority of the Committee saw the 6 month tenancy as too short, and called for it to be a minimum of 12 months.

The Assembly will debate the general principles of the Bill on 1 April 2014. The Bill still has three more stages to pass through at the Assembly before it receives Royal Assent and is likely to be amended before it becomes law.