Insights and Opinions Calum Davies 13/04/2021

Improving homes: why the Welsh Government can't put this key priority on the back burner

In our third blog focussing on the NRLA Wales' manifesto calls ahead of the Senedd Cymru/Welsh Parliament election, we outline how to improve homes in the private rented sector (PRS) and why.

With ambitious decarbonisation targets proposed by government becoming an increasingly important policy priority, housing has very much been at the forefront to reduce carbon, alleviate fuel poverty, and improve the quality of stock.

Despite significantly narrowing the gap between high fuel poverty rates and lower energy efficiency between the private and social sectors, the former remains challenging. According to the 2017/18 Welsh Housing Conditions Survey, the PRS is dominated by older dwellings – 43% of its stock was built prior to 1919. The proportion of dwellings with single cavity walls and off-grid properties is also higher in the PRS. For landlords to continue investing and improving these dwellings, more support is required or stock will diminish. 

Grant funding opportunities in Wales are complex, with landlords required to meet strict eligibility criteria.  Some grants are only available to specific deprived communities. However, not all people who suffer from deprivation live in a disadvantaged community, leaving much of Wales as a grant funding ‘desert.’ The Nest scheme is open to more areas across Wales but requires the tenant to be on a means-tested benefit and be medically vulnerable to the effects of the cold. In the NRLA’s view the focus should be on improving the least energy efficient dwellings with high EPCs. This is especially key as the PRS is a more transient sector.

Local authorities are in the best position with respect to which groups should be targeted for support. That is why the Eco Flex scheme is a useful tool to allow councils the flexibility to target specific groups. Sadly, however, take up of Eco Flex money by Welsh councils remains low with many suggesting they do not have the resources and personnel to administer and monitor schemes. The NRLA are calling for the Welsh Government to fund officers to give local authorities the capacity to maximise Eco-flex opportunities. Money should be ring-fenced to improve the PRS and also think more strategically regarding improvements for the least fuel-efficient dwellings. Alongside these recommendations, we urge the Government to make more holistic grant funding support available across Wales, like the UK Government’s Green Homes Grant.

The PRS should play a key role in solving empty homes

As of 2019, there are around 27,000 private sector homes in Wales that have been empty for more than six months. The Welsh Government also has empty homes grants available as part of its Houses into Homes and Valleys Taskforce programmes.

However, the current system does not maximise the problem-solving potential which private landlords possess, which could be used to take on empty properties. This is evident in the second-home Land Transaction Tax (Wales’ version of stamp duty) premium. Landlords can provide affordable rental housing for those who cannot buy nor access social housing. As such, buy-to-let properties have a purpose beyond providing an income or pension for the landlords and should be separated from second homes. The problem of rental properties being tied to second homes in this way is discussed in the Welsh Government’s recent report from Dr Simon Brooks . In short, this means scrapping the LTT premium for rental properties. In our view discouraging landlords to not take on empty properties is not only illogical, but unethical.

Private landlords’ capacity could also be utilised by local authorities to meet their objective of filling empty homes. Landlords could be encouraged to do so through interest-free council loans or grants in low-value and hard-to-rent areas. There should also be a holistic package of Council Tax incentives to replace the arbitrary way local authorities currently charge Council Tax premiums on empty homes.

Improving private rented housing stock is recognised as essential to making the PRS an attractive place to live. Therefore, we should all work together to achieve this. For the Welsh Government, this should mean financial support and holistic approaches to achieve this mutually desired goal so that the best possible outcome is achieved for landlords and renters.