Plaid Cymru has pledged a package of measures aimed squarely at tackling instability, unpredictability,and tenant vulnerability. These include the end of so-called ‘no fault’ evictions, a limit on rent increases and a ban on bidding wars.

Since forming a new Welsh Government in May, Plaid has reconfirmed this pledge, with cabinet minister for local government, housing and planning Sian Gwenllian referring to a ‘sense of urgency’ in the need to bring forward new legislation.

Evidence shows that ‘no fault’ evictions, under which a landlord can end a tenancy without reason, can create insecurity and discourage tenants from asserting their rights. Meanwhile, low rental supply coupled with strong demand in recent years has led to tenants losing out, as competition can lead to tenancies being agreed before a property even comes to the market. These issues, on top of affordability constraints, provide a case for reforms to address behavioural problems in the market.

The potential impact of rent control

However, when it comes to limiting rent increases, while a rent control tied to the Consumer Price Index (CPI) or wage growth acts as a shock absorber – a ‘soft’ form of rent control, not a hard freeze – multiple studies show that it can reduce housing supply and slow new construction.

Indeed, faced with the increasing cost of refurbishment, EPC compliance and borrowing costs, extra regulation could discourage investment and shrink supply, and we could see landlords in Wales choosing to exit the market or converting to owner-occupation.

This process is already happening. Savills Research estimates that 254,000 buy-to-let properties across Great Britain were brought to market for sale in the 12 months to March – equivalent to 697 homes a day. Approximately 14% of this stock is being bought by other landlords and rented out again. These buyers are typically what we might call ‘professional landlords’, who own larger portfolios and manage their investment within a limited company.

Further information

Contact Andrew Weeks