NRLA warns Welsh Government’s Homelessness Bill risks straining the sector without clear strategy
The Welsh Government’s new Homelessness and Social Housing Allocation (Wales) Bill aims to strengthen homelessness prevention and improve access to social housing. But we have warned that without clear guidance, funding, and a plan to address Wales’ shrinking rental supply, the legislation could create more problems than it solves.
Intentions welcomed
The Bill proposes several major changes, including removing the ‘intentionality test’ for homelessness, extending the definition of when someone is “threatened with homelessness” from 56 days to six months, and adding a ‘deliberate manipulation of the system test’.
Whilst these reforms are designed to offer earlier and fairer support to people at risk of homelessness, they could have wide-reaching implications for landlords, tenants and local authorities unless backed by proper resourcing and guidance.
In our evidence to the Local Government and Housing Committee, we have welcomed the Bill’s ambition to offer earlier and fairer support, but raise serious concerns about its practical delivery.
A need for clarity and resources
A key concern is that the removal of the ‘intentionality test’ depends on there being a “robust housing supply” - a term the Welsh Government has not defined. With private rented stock declining in many areas of Wales, there is a real risk that this threshold will not be met. In addition, we have highlighted the need for guidance on the ‘deliberate manipulation test’, particularly regarding rent arrears and tenant behaviour during repossession proceedings. Our concern is that landlords acting in good faith could trigger a situation where tenants are prevented from accessing support.
Possession trends in Wales
Our data shows that while Welsh landlords are less likely to seek repossession than their English counterparts, they are more likely to use breach-of-contract grounds rather than the Section 173 “no-fault repossession route”. Since the introduction of the Renting Homes (Wales) Act (RHW Act), longer notice periods have incentivised landlords to use fault-based repossession routes to address issues like rent arrears quickly.
This shift has led to a higher proportion of tenants in Wales being found intentionally homeless due to fault-based evictions - despite little evidence suggesting that arrears or breaches are more common in Wales. We are calling for robust guidance to ensure that tenants and landlords are encouraged to work together to find a sensible outcome to repossession, and to ensure that the deliberate manipulation test is not applied widely to possession claims in Wales.
Caution on rent withholding powers
We have also highlighted a particular concern with how the RHW Act allows tenants to withhold rent if a property is deemed unfit for human habitation – but only a court can make that determination. Tenants could therefore act without legal grounds, only to find themselves in arrears and classed as having deliberately made themselves homeless.
This risks creating uncertainty for both tenants and landlords, and unambiguous guidance will be needed to prevent disputes and unintended outcomes.
Housing supply shortages
We have also pointed to clear evidence that the private rented sector is contracting in many parts of Wales. Whilst Cardiff and Swansea have seen growth, most other areas are losing rental stock. Between 2025 and 2027, the private rented sector in Wales is forecast to contract by an average of 1.6% (excluding a handful of regions), with particularly sharp drops expected in Gwynedd, Wrexham, and Pembrokeshire.
We have noted that overreliance on purchasing existing homes for affordable housing is exacerbating the issue. We are calling on the Welsh Government to develop a national housing target, separate from affordable housing goals, with a clear plan for delivery to meet demand across all tenures.
Firm foundations needed to tackle homelessness
We support the Bill’s intentions but without strong statutory guidance and a clearly defined housing strategy, the proposals risk placing greater pressure on landlords, tenants, and local authorities alike.
We will continue to campaign for policies that balance tenant support with protections for responsible landlords. As ever, the NRLA remains committed to working with the Welsh Government to create a more functional housing system.
