Welsh landlords & agents have serious misgivings about longer notice periods

The way that private rented sector (PRS) landlords operate their properties in Wales is going through one of the biggest changes in decades as the Welsh Government, under its devolved powers, pass and implement the Renting Homes (Wales) Act 2016.

This Act is to take effect from the 1st December 2022, while the Welsh Government has confirmed the extended notice period for existing tenancies will take effect from 1 June 2023. The six-month notice period already applies to new contracts starting from 1 December 2022.

Tenants are to be referred to as contract holders, tenancy agreements as occupation contracts with “written statements”, and new rules are to ensure that rental properties are “Fit For Human Habitation”.

The changes are radical and many aspects of the current legislation will change drastically, from the extended notice periods, extended succession rights, joint contracts, to changes to landlords’ rights when properties are abandoned.

The Renting Homes (Wales) Act was originally due to come into force on 15 July 2022 but was pushed back until 1 December 2022 last May.

Deep concerns from landlords and agents

The changes being introduced by the Welsh Government follow along a similar but not in an identical vein to those introduced in Scotland – Private Housing (Tenancies) (ScotlandAct 2016. England could soon be followed suit with the Renters’ Reform Act, most likely to be enacted in 2023.

The Welsh Government claims the legislation will improve security of tenure for renters by, amongst other reforms, increasing the notice period for landlords seeking repossession of their properties, usually when the renter in not in breach of contract, the no fault eviction case.

The new rules have been described as the biggest change in Welsh housing law for many decades, with the old concept of a tenancy being replace by what is termed “statutorily regulated occupation contracts.”

However, while landlords coped with goodwill and flexibility with extended notice periods during the Covid, they are far less comfortable and less willing to accept a Government perusing this as a permanent change.

Objections to a permanent change

Speaking for letting agents, Tim Thomas, Policy and Campaigns Officer for Propertymark, has said of the change:

“Letting agents and their landlords showed great flexibility at the outset of the pandemic in their support of extended notice periods, but again we have a government pursuing permanent changes to what were supposed to be temporary measures.

“The Welsh Government says extending notice periods for existing tenancies from June is necessary to bring down the rising cost to taxpayers of temporary accommodation. What it fails to understand is the knock-on effect this strengthening of tenants’ rights will have on the confidence of landlords.

“New tenancies will also have to comply by 1 December.

“The private landlords our member agents represent have become important housing providers, but they need to know they can regain possession of their property when they need to do so.

“The best way to support tenants is to focus on policies that can increase the supply of housing rather those that will constrain it.”

Despite the vast majority (90%) of landlords and letting agents responding to a recent Welsh Government consultation exercise being strongly against extending the six-month notice periods to existing tenancies, the change is to go ahead.

Conversely, tenant representative bodies, as might be expected, responded to the consultation very much in favour of the proposed extension, with the overwhelming majority favouring a 1 December start rather than waiting until June next year.

Propertymark the letting agents representative body has strongly objected to the Welsh Government’s consultation proposal to extend the notice period required which will extend existing periodic standard contracts, from two months to six months, under section 173 of the Renting Homes (Wales) Act.

In the body’s consultation response to the Welsh Government it outlined its recognition of the importance of security of tenure, especially for vulnerable groups. However, as it explains, “…we raised caution about the lack of supply in the Private Rented Sector (PRS) and how it would drive more landlords to sell up and leave the sector. This could mean reduced housing options for the most vulnerable and increased rents for tenants who remain in the sector.”

The Welsh minister with responsibility for housing, Julie James has responded by saying:

“The proposed extension of the six-month no-fault notice period was always going to generate highly contrasting views.

“Whilst noting the views of those landlords and agents that responded, I have decided that the societal and individual benefits accruing from the extension outweigh the negative impact on individual landlords, particularly in view of shorter notice periods of one month or less applying where there is a breach of contract.”

Regulations implementing the Renting Homes (Wales) Act (2016)

Regulations 2022 Renting Homes (Wales) Act 2016 (Consequential Amendments to Secondary Legislation) (Amendment)

Regulations 2022 Renting Homes (Fitness for Human Habitation) (Amendment) (Wales) Regulations 2022

Renting Homes (Rent Determination) (Converted Contracts) (Wales) (Amendment)

Renting Homes (Wales) Act 2016 (Saving and Transitional Provisions) Regulations 2022

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