Rent Controls: Plaid Cymru and the Greens unveil Manifestos

The Senedd elections are now less than a month away and housing is set to play a pivotal role in the coming campaign.  

Wales, like the rest of the UK, is in the midst of a supply crisis which has only worsened in recent years with Rent Smart Wales Data showing the principality has lost over 3,500 privately rented properties since the last Senedd election.  

Such a crisis limits accommodation options for renters and leads to increased prices. This feeds calls for rent controls, which have been seized upon by Plaid Cymru and the Welsh Greens in their manifestos. 

So, what are they calling for? 

Plaid Cymru 

Plaid Cymru make reforming the housing market a central aspect of their offering to the Welsh people and make clear their policy on rent controls, stating:  

‘Fair rent-setting – through limiting annual rent increases to the lower of wage growth or consumer price index inflation, or a clearly defined equivalent benchmark.’ 

This proposal comes alongside a commitment to end the no-fault possession route currently available to Welsh landlords through section 173 of the Renting Home Wales Act 2016 (RHWA), which itself was only introduced in December 2022. 

Wales Green Party 

The Green Party in Wales goes further still in their proposed reforms of PRS in Wales. Their manifesto outlines a commitment to not only ‘freeze rents’ but to then introduce ‘Rent Pressure Zones’ following the freeze. In these zones local rent caps would be set and increases would only be permitted where ‘landlords deliver genuine improvements to homes’.   

Expanding upon the proposed reform package, the Greens also commit to removing the no-fault eviction route for private landlords. 

What this means for the private rented sector 

Calls for rent controls are not new and we have seen numerous proposals over the years from different actors extolling the virtues of controlling rents, despite decades of compelling evidence that these inevitably lead to lower levels of supply and worse outcomes for renters. However, with polling pointing towards a Plaid Cymru led Government in Wales post 7th May, albeit likely in a coalition of some form with Labour, these policies have to be taken seriously. 

A key, but often overlooked, consideration in relation to these policies is that landlords who let below the market rate will be forced in many instances to increase rents to the market rate at a minimum before these proposals come into force.  

A failure to do so would effectively trap properties below-market rates for the foreseeable future, allowing landlords no means of reacting to increasing costs or market shocks.  

Furthermore, the Greens proposal to ‘freeze rents’ would very likely precipitate exponential rent increases. This is because as soon as the policy would be put forward in the Senedd, landlords across Wales would be compelled to ensure rents cover estimated future costs, front loading costs for tenants.  

How soon could rent controls be introduced? 

Landlords should certainly be concerned about the future direction of housing policy in Wales, but we should also be clear about potential timelines.  

Not only are we weeks away from the elections, the outcome of which will determine how strong a voice respective parties may have in government, but any new administration would have to introduce legislation to enact any rent control policy. You need only look at the experience of the Renting Homes (Wales) Bill to realise that can take time.  

If rent controls are in our future, they are not coming into force from 8th May but would instead take time and go through a consultation process which the NRLA would feed into. 

You may remember that the current Welsh Government had previously proposed exploring rent controls as part of the right to adequate housing, however following consultation that the NRLA played a key part in these proposals were abandoned. Our position has not changed, and we will bring the same opposition to any rent control proposals; making our views clear that these work for neither landlords or renters and would likely worsen the already dire housing supply in Wales and representing your views on the issue. 

They say a week is a long time in politics, well with almost a month to go until the Welsh people go to the polls on the 7th May anything really could happen and the NRLA will be following the debates and updates of this campaign closely while planning ahead to fight for you once the new Welsh Government is in place.