Y Pwyllgor Cydraddoldeb, Llywodraeth Leol a Chymunedau Y Bumed Senedd
Equality, Local Government and Communities Committee - Fifth Senedd12/03/2020
Aelodau'r Pwyllgor a oedd yn bresennol
Committee Members in Attendance
|David Melding AM||Yn dirprwyo ar ran Mark Isherwood|
|Substitute for Mark Isherwood|
|Dawn Bowden AM|
|Delyth Jewell AM|
|Huw Irranca-Davies AM|
|John Griffiths AM||Cadeirydd y Pwyllgor|
Y rhai eraill a oedd yn bresennol
Others in Attendance
|Alun Evans||Uwch-swyddog Ymgyrchoedd ac Eiriolaeth, Cyngor ar Bopeth|
|Senior Campaigns and Advocacy Officer, Citizens Advice|
|Dan Wilson Craw||Cyfarwyddwr, Generation Rent|
|Director, Generation Rent|
|David Cox||Prif Weithredwr, ARLA Propertymark|
|Chief Executive, ARLA Propertymark|
|Douglas Haig||Is-gadeirydd a Chyfarwyddwr Cymru, Cymdeithas Landlordiaid Preswyl|
|Vice-chair and Director for Wales, Residential Landlords Association|
|Jennie Bibbings||Rheolwr Ymgyrchoedd, Shelter Cymru|
|Campaigns Manager, Shelter Cymru|
|Nick Morris||Rheolwr Polisi a Chyfathrebu (Cymru), Crisis|
|Policy and Communications Manager (Wales), Crisis|
|Rob Simkins||Llywydd Undeb Cenedlaethol y Myfyrwyr, Cymru|
|President, National Union of Students Wales|
Swyddogion y Senedd a oedd yn bresennol
Senedd Officials in Attendance
|Chloe Davies||Dirprwy Glerc|
|Katie Wyatt||Cynghorydd Cyfreithiol|
Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.
The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.
Dechreuodd y cyfarfod am 09:30.
The meeting began at 09:30.
May I welcome everyone to this meeting of the Equality, Local Government and Communities Committee? The first item on our agenda today is introductions, apologies, substitutions and declarations of interest. David Melding will be substituting for Mark Isherwood for items 1 to 7, and indeed throughout the committee scrutiny of this Renting Homes (Amendment) (Wales) Bill that we will be scrutinising today. We've received apologies from Mark Isherwood with regard to item 8 on our agenda today, and we've received apologies from Caroline Jones for the whole of the meeting. Are there any declarations of interest? There aren't. Okay.
We will move on to item 2, which is our third evidence session with regard to the Renting Homes (Amendment) (Wales) Bill, and I'm very pleased to welcome here this morning David Cox, chief executive of ARLA Propertymark, and Douglas Haig, vice-chair and director for Wales of the Residential Landlords Association. Thank you both for coming in to give evidence to committee today. Perhaps I might begin with some general questions. Firstly, whether you consider there is a need for this Bill and your reasons for your conclusions.
I think we understand the direction of travel here. I think the Residential Landlords Association has been sympathetic that the private rented sector has matured over the last 30 years since the main pieces of legislation that we operate on were passed, and that those who live within the private rented sector are very different; it's a different demographic from what it used to be, therefore we do need to adapt to that market and the legislation underlying it needs to. So, we are sympathetic to the direction of travel and sympathetic to the changes.
Our issue is that we've been aware of these changes over the years and we've been pushing for a wider range of reforms, which we did when the Renting Homes (Wales) Act 2016 was first introduced. I suppose we find it slightly disappointing that what we've done is we've taken one small section and tried to implement that with a last-minute push, rather than really looking at the underlying changes that need to be made to the sector, and that is predominantly around making possession in other ways easier and faster. I suppose we'll come on to that a little bit later.
I agree with everything that Douglas has just said. But I think on this one, this is an emotive issue more than an actual issue. Can I just give you some statistics? In England and Wales during 2018, there were 93,817 possession orders granted by the courts; 61.75 per cent of those were made for social landlords, and when we consider that the social sector is now smaller than the private rented sector, the fact that they have the majority of cases of possession I think tells us something. Secondly, according to written answer 257138 in Westminster last year, there were 6,913 evictions under section 21. Now, that's 7.4 per cent of the possession orders granted, and therefore the suggestions that have been made very regularly, very frequently and very publicly that section 21 is the largest cause of homelessness in this country is just simply not true.
And when we think about that statistic, I think it's a really important statistic; 6,913 out of a private rented sector in England and Wales of about 4.5 million tenancies. That equates to about 0.15 per cent of tenancies that were subject to a section 21 eviction. Therefore, the question, 'Is there a need for a Bill?', I would suggest that something that didn't affect 99.85 per cent of tenancies in this country in 2018 does not demonstrate an overwhelming need for a Bill to change it.
Okay. Again, we'll come on to these issues. Delyth.
Can I just ask a supplementary?
On that point, considering that, granted, the proportion of people who will be affected by that section will be small, but the impact it will have on those people is so huge, with the threat of homelessness, do you think that there might be a case—? I don't want to ask you too much of a leading question, but do you think it's not just possibly about the proportion of people who will be affected, but the severity of the impact on their lives?
I think it is a balancing act, in fact. So, yes, there is a significant impact on a tenant losing their home, but, similarly, there is a significant impact on a landlord as well, if it takes them 12, 18 months, potentially, under these proposals, to regain possession of their property, during which time they won't necessarily be getting any rent, and, therefore, they may be being repossessed due to nothing that they can do about it.
And we also have to factor in, with things like the proposals in this Bill, if that tenant is also anti-social, and one of the reasons for the eviction is anti-social behaviour, it's not just the landlord who's being impacted, but the entire local community, where there may be a situation where neighbours, other people, particularly if it's in a block of flats, are coming to officials saying 'What are you doing about this?' and you've just passed a law that prevents the landlord being able to do anything for months on end, especially when we consider the anti-social behaviour ground, is almost impossible to actually get possession—[Inaudible.]—at this moment in time.
Could I just bring Dawn in at this stage?
But that's not a no-fault eviction.
That's not a no-fault evicition.
But, at the moment, if they went down the section 8 route of, I think, it's ground 14 of the anti-social behaviour grounds, they're almost never going to get possession. Therefore, they use—
So, that's a misuse of a no-fault eviction.
I don't think it's a misuse at all because—
Well, it is, isn't it, because you have a section in the law that allows you to evict for cause—'no-fault eviction' is what it says. It's a no-fault eviction. So, you're suggesting that you will use no-fault evictions to evict people actually when there is a fault.
Absolutely. It happens all day, every day.
Well, then it shouldn't, should it, because that's not what the rule is there for?
But, unfortunately, the law in section 8, the grounds for possession, don't work, and, therefore, it's the only reasonable avenue a landlord can use to get possession.
So you gerrymander the law to suit yourselves. Is that what you do?
I wouldn't say it's gerrymandering it; I would suggest it's using it exactly as the law was created.
It's using it in an inappropriate way, I would suggest.
I wouldn't agree with that characterisation.
Well, I'd like you to come and speak to some of the constituents that use my office, pursuing some of the cases in just situations like that. Thank you, Chair.
More than happy.
To just clarify around that as well, which, I think, hopefully, comes across both points, particularly yours, is that there is a—. David's statistics are very poignant, and your case is very good as well. And that's why it comes back to my original point, which was that we recognise that we do need to evolve this sector. But we're just taking one small part for what some people see as an injustice or an inappropriate use of the law. My point would be that it's not a no-fault eviction; it's a no-reason-given eviction, and that's because the other parts of the law are not sufficient enough to be able to rectify and evict people on the basis that they should be being evicted on. And, yes, I would much rather see all of my members be giving notice to people on the reason why they're giving notice, but, at the moment, the law is not sufficient enough for our members to gain possession in anything like the timescale or the ease that it needs to happen, with some of the detrimental situations that are being caused to themselves, the property, and, more importantly really, the local communities, very often.
We'll come back to this, Chair.
We'll come back to it, yes. It's obviously not a satisfactory situation, no matter which way you look at it at the moment, is it, so, obviously, change is necessary. But we'll come on further to these matters, unless there's anything else you'd like to say at this stage as to why no-fault notices are used, even when there has been a breach of contract. Is there anything you would add to what you've already said at this stage?
Well, I think it goes to what we have just said. It is easier, it is quicker, it is cheaper, and you are guaranteed to get possession than using the current section 8 grounds under the housing Act, or their equivalents under the renting homes Act, when it comes into force.
I think you just have to—. I know I've said this in these committees before as well, but we really do have to remember who these landlords are. They're not some mega corporate behemoths; they are individuals that have either fallen into owning properties, or are genuinely saving up for the long term, for their future, their pension pots, or to pass onto their children. They are as uncomfortable going into a court situation as the tenants are. And when you are talking about anti-social behaviour, or serious rent arrears, they are sometimes in as much stress as the tenants can be because they are under threat of eviction or anti-social behaviour. In cases that I've had personally, I am literally phoned three or four times a day by neighbours complaining about tenants that I am struggling to get rid of through the current existing route, which doesn't help anybody's situation. So I think what we're saying is, absolutely we need to look at this; this on its own, isolated, without looking at the bigger picture, is not the right approach. And we're happy to work together to create a more balanced point of view.
Okay. Let me just ask you a further question before we turn to other committee members. This legislation will amend the Renting Homes (Wales) Act 2016 before it's actually been commenced. Do you have particular issues with that fact?
I suppose you have an issue on the basis that we're amending legislation that we haven't even seen how effective it is yet. So it would have been nice to have had this legislation bed in, and to understand is it required, because, ultimately, the renting homes Act was supposed to really balance the rights and responsibilities of both parties, and to see if it does do that before amending it again. However, if we're going to go ahead with it anyway, without seeing that, then it is better that it is all implemented at the same time. So it's kind of a catch-22—we'd rather it was not, but we'd rather also not have lots of multiple implementations of legislation, as is currently happening, because it makes it very difficult to constantly keep members up to date.
I think that is a really important point—that we do have significant and regular legislative change in this industry. It is very difficult for people—. People who are members of the trade bodies, professional bodies, they get regular updates from their trade bodies. But for private landlords, it's only a very, very small percentage. It's similarly only a very, very small—it's probably about half—in the lettings industry. And, therefore, people just don't know that the laws are changing. And as the laws are becoming much more prescriptive, much more complex, constant legislative change is quite difficult to keep up with. So, we don't support the concept of this Bill, but, if you are going to do it, I would suggest you do it all in one go.
Okay. And David Melding.
I was going to ask you about the knowledge bases amongst the smaller landlords; I think it's fair to say that the larger providers would be aware of the impending law change. It's very clumsy that we amend something before it's commenced, and I have, myself, made that point. And I suppose Rent Smart Wales also, on the training, would have prepared landlords for this law change. But I think it's not a terribly elegant process, I would agree, in this instance. But I don't know if you've picked up any serious knowledge gaps, and whether you're fearful that that may feed through to bad practice.
There are inevitably going to be knowledge gaps. And as much as I would like to sit here and say that every landlord in Wales is fully up to date with every piece of legislation, unfortunately, I do still come across landlords who are completely unaware of Rent Smart Wales and, even more scarily, are completely unaware of deposit protection, which has been in for 12 years—something like that. So it's always an uphill battle. And to be honest, that was one of the positive things—a few positive things I said about Rent Smart Wales—is that it should create a better platform for communication to landlords. Unfortunately, that doesn't seem to be having as much of an impact as I would have hoped. I'd love every landlord to be a member of our organisation, and keep up to date with us.
But in terms of the renting homes Act, when that comes in, it's not like the fees or the holding deposit changes that we've recently had implemented, which are relatively minor and likely to be enforced fairly easily by tenants; this is a huge piece of legislative change, which fundamentally changes the basis on which renting is carried out. And without harking back to evidence I gave on the renting homes Bill in general, the Welsh Government, and stakeholders, have a duty to seriously invest in making sure that landlords are aware of how monumental some of these changes are, otherwise we will have some serious problems.
I agree entirely. I think, within the letting agent community, people who do it in the course of their business, their day-to-day jobs, knowledge of the renting homes Act is much higher than it will be within the self-managing landlord community, where it is, effectively, their secondary business activity in most cases, but it is still quite low. They understand the general principle but, because this has been such a protracted process of actually bringing it into force, they're not paying a great deal of attention to it.
So, I do think there's going to need to be quite a lot of work, and we're already planning the work that's going to be needed for our members in Wales for when it comes into force, because, as Douglas has said, it's a fundamental change to what they have been doing day in, day out, for the last 30-odd years. So, on that one, as much legislative certainty in as far as advance as possible means that Rent Smart Wales, the RLA, ARLA can then get our members up to speed as quickly as possible. But there aren't fantastically high levels of knowledge of how it will work yet.
And I think that comes down to having a definitive date that is a fairly long time in the future that this is going to be brought in, because we have had multiple dates when—. I fully understand there are things out of the gift of the Welsh Government and I do understand why things have been delayed. But we're in a position where I've been giving talks for three and a half years saying, 'It's coming in six months' time' sort of thing. And I'd rather we say it like, 'It's coming in in a year' or 'It's coming in in 18 months' and we have a joint communication strategy between Welsh Government and stakeholders to make sure that this is genuinely put out there and people are prepared.
And how do you think this Act is going to operate, once it is commenced and, let's assume, amended in the fashion proposed? It's central aim is to increase security of tenure for tenants. Do you think it will achieve that?
Do you want to go first or shall I?
I think the concept, actually, of security of tenure is an interesting one, and I think—. Are we focusing on the right aspect? Do tenants want very long tenancy agreements, or do they want to live in their property for as long as they wish to do so? Taking it out of the private rented sector as an entire—. Think about it in the owner-occupied sector. People are buying a house but we have two-, three-, five-year fixed-term mortgages. Very few people take out five-, 10-year fixed-term mortgages, because they just don't know about what they're going to want to be doing and don't want to be tied in to difficult or penalty clauses within mortgages. So, a lot of people take two- or three-year mortgages. They don't plan on only living in the property for two or three years, but they don't want to be tied to a mortgage company for that length of time.
I would suggest—and certainly all of our member data suggests—that's exactly the same with private tenants. They want to live in the property for as long as they want to live in it, but they don't know, from day one or pre-day one, how long that's going to be. So, most of our members do not say, 'Here's your six-month or your 12-month tenancy agreement'. They ask the tenant, 'How long do you want your tenancy agreement to be?' The answer comes back, 'Six or 12 months', because then they know they're tied in for six or 12 months, but their circumstances might change during that time and maybe they want to move on, maybe they want a new tenancy.
So, I think the question of 'How long is the initial term?' is actually the wrong question. The system we have at the moment provides the flexibility for tenants to have whatever length of tenancy they want. If they want to renew it, they can, and, in most cases, landlords don't increase the rent as a result of it, because, for a landlord, the most efficient way of generating rent is a long, well-maintained tenancy. For a letting agent, their most efficient way of generating fees is a long, well-maintained tenancy. There's a huge amount of extra work for tenancy churn, and therefore—. I know there are a lot of calls for longer term tenancies, but there isn't a massive appetite in the market for a long minimum term. They want flexibility.
I mean, perhaps. It is a perfectly respectable argument on flexibility, but it doesn't really answer my question. It does seem, to me anyway, on the face of it, that this law change will increase security of tenure.
Certainly, it obviously gives the six-month notice period, and, again, without trying to repeat myself too much, we're highly sympathetic with that and it will have that impact. I suppose we would like to see other, wider changes made to it. If we're not going to pause and reflect and try and really implement those changes and make the sector much more balanced by looking at things like housing courts or tribunals, then there are a number of I think fairly minor amendments that could be made to the way that the Bill is drafted or the amendment is drafted to actually make it slightly more balanced for landlords without detrimenting tenants at all. So, I don't know whether that's something you want to go into now. I know those are questions that you may be raising slightly later on.
And then the approach the Welsh Government is taking in this Bill—compared to what's already now in force in Scotland and what is proposed in England, where do you rate the Welsh approach compared to Scotland and England?
Scotland's a very trendy area to be comparing at the moment with, because, obviously, there are large, wide-sweeping changes that they've made to things. Obviously, it doesn't provide indefinite tenancies, which Scotland currently has. Currently, England is obviously maintaining what is existing in Wales for the time being, although there is a Bill being drafted at the moment that looks to probably possibly make it more similar to Scotland in England, but we don't know; it's too early to say that. But you've got to understand the fact that, in Scotland, it's still very early days in what they've implemented, and, in fact, they spent three years putting together the system that they have now. We are not spending three years; we are spending six months, I think, looking at this, and not making the essential infrastructure changes that I think need to be made to do that. So, I don't—. It's—. To say whether it's been successful in Scotland or not—it's difficult to know at this very early stage.
We don't necessarily want to examine the Scottish legislation in detail, but is it reasonable for me to infer that, if there's change along these lines, you prefer the Welsh approach at the moment to what is likely in England, which will go further than this, it seems—that's my reading, anyway—and certainly Scotland?
It will go further, and maybe David knows more, because David does focus much more on English legislation. But it's a balance, isn't it? And, ultimately, if we can get a number of these changes that we're asking for in terms of housing courts or tribunals, then possibly it's something—
I'm sure we'll look at those issues as well later.
I think it's going to depend on what the English legislation is. At this point in time, we don't actually know what it's going to contain. So, I think it's a bit difficult saying how it would be different for England. For Scotland, I would echo everything that Douglas has just said and highlight the process that they went through. They got a housing court up and running 12 months before they introduced their ban on section 21—or section 33, as it was in Scotland—and one of the practical implementation problems that we're seeing at the moment is it is too early to do that evaluation, because there are still a lot of short assured tenancies still in existence up in Scotland, because, unlike here, where the proposal is that it automatically becomes a standard occupation contract when the renting homes Act comes into force, in Scotland, they didn't do that. In Scotland, it was a private residential tenancy from the date the legislation came into force, which, I think, was 1 December 2018, and, therefore, there are still a lot of SATs out there, and what we are finding is that the tribunals were under-resourced. There weren't enough judges. So, whilst we're getting the consistency, there just weren't enough judges to actually staff the courts, and, therefore, that has created quite a significant backlog in Scotland.
I think they thought there were going to be 700 cases in a year, and there were 700 cases in the first three months. So, even when you do put a lot of planning in, it's—
I'm trying to just establish whether the Welsh Government seems to have taken a more balanced approach in terms of—
So, we don't need a forensic account of what's happening in Scotland, but, if it was a paragon of virtue, then I've given you the chance to say that, though, obviously, that's not what you've said. We're clear in the evidence.
My final question in this part: we know a lot of landlords are accidental, but there is another group then with often just one or two properties, because we are in the age, remarkably, of long-term low or even negative interest rates, so they buy properties to get a better return on investment. I don't condemn people for that at all. It's a perfectly rational thing to do, and they can be excellent landlords. But one thing is that others then will do part of that investment with a mortgage, and I think you have raised the issue of what happens if a possession cannot be obtained quickly and yet there's a mortgage lender behind this, owning, in effect, half the house, and the other half is the person's investment. So, do you just want to explain why you think that's a particular problem in the legislation that's proposed, and how could it be amended to cover that anxiety you have?
So, the mortgage lenders are interesting. They're a fairly quiet but incredibly powerful body in our sector, in that we are very, very reliant on them understanding legislation, being comfortable with legislation changes, and happy to operate in what is an increasingly different and relatively small environment in Wales, and this is what we have to—. Not to be disingenuous to the Welsh market—I mean, that's where I operate—but it is fairly small compared to what the lenders are generally dealing with in England, so—. And there have been comments around the fact that—. It's basic things like what is currently existing in ground 2 in current legislation, which allows the mortgage lender to take possession of the property on mortgage arrears, doesn't exist under the new renting homes Act. And that is something that—I know it sounds strange that I want the ability for the mortgage lender to be able to repossess a property from underneath me, but, actually, if they are more comfortable in lending to this environment, then they will still continue to be competitive in this environment, and being competitive is important for a continued supply of private rented properties within Wales.
So, as I say, they tend to be fairly quiet and understated in the way they put their cases forward, but I would certainly listen to them when they say something, because they have a very strong control on what happens in the Welsh market.
I think there are two particular and specific points on this one. One is that a lot do have clauses within their conditions. I'm not saying all, and it is changing as the market adapts, but a lot do have conditions within their terms that you can't offer longer than a 12-month tenancy, in the same way that we have seen—and I know that is changing more so—that a lot had also had clauses that you couldn't let to housing tenants in receipt of housing benefit. I know that one is changing, but, the 12-month one, there aren't, as far as I'm aware, massive moves to change that you can't offer longer than a 12-month tenancy.
Similarly, that also exists in some leasehold—I know we're also talking about mortgages here, but we also have to factor in leases as well. In some lease agreements, if the property is being rented out by the tenant of the lease, the landlord of the property, they have to get permission from their superior landlord and, again, there are terms in some blocks of flats' leases that say you can't offer longer than a 12-month tenancy. So, that is another factor that needs to be considered.
The other one, in relation to mortgages specifically, is cost. Buy-to-let mortgages are by their very nature a higher-risk investment for a bank than an owner-occupier mortgage and therefore they attract a higher mortgage interest rate. If that risk is increased, that mortgage rate will unquestionably be increased to go along with the added risk on the lender. Increased costs to landlords are passed on to tenants via increased costs to tenants, and therefore is this something that we want? And what are the knock-on consequential impacts of these sorts of things?
I think this is a good opportunity to have a conversation with them to reset and renegotiate some of their standard mortgage terms and conditions. As the RLA, we have worked very hard with certain banks to try and get rid of the removal of things like 'no DSS'—to use that phrase—and that has happened successfully and is continuing to happen, but there are still terms and conditions that are currently existing in long-term mortgages that need to be changed. This is a—. I see this as a good opportunity to say, 'Right, mortgage lenders, this is a change to the legislative environment. It's going to increase risk for you if the landlord is going to struggle to get possession. What do you need to ensure that you're more comfortable in lending in this market, and, by the way, we want all these terms and conditions changed as well, in the longer term.' That would be my approach.
Sorry, I missed my point, and that follows on very nicely. At the moment, it's a two-month notice and, therefore, in a lot of mortgage lenders' conditions, they have a two-month repossession period as well. If the landlord falls two months into arrears, then that's when they can start their repossession proceedings, and, therefore, we would need to be careful that if it moves to six months, but the landlord is still at two months, it could mean landlords being repossessed if a tenant—before a landlord can do anything about it under these provisions. He or she could end up being repossessed before the expiry of a no-fault notice.
We are a quarter of the way through our questions and more than halfway through our allotted time. So, I'm afraid we're going to have to have fairly concise questions and answers. Huw.
I'll rattle through them, Chair, and just draw Members' attention, as always, to my register of interests. Could I ask, first of all, what's your assessment of the quality of Welsh Government engagement with you as a sector, both in terms of the consultation and your responses to the consultation, but also in terms of wider meetings that might have led up to the introduction of this? Has the engagement been good, average, poor?
So, at the very beginning, we were disappointed that there wasn't a conversation beforehand, but I understand there were political reasons behind announcements in England versus Wales. So, I understand that that was something that needed to be pushed forward. We were having conversations behind the scenes, as we have been since probably 2013 and 2014, around this subject. So, we would have appreciated it if maybe we were given some level of heads-up on that.
And then it's a split process. I would say that the civil servants have been excellent in terms of giving access—I don't necessarily always agree with what they're saying, which is fine, but they have given us time and the ability to put our viewpoints across. I think that is developing over time as a relationship to say we're not an ideological organisation, we are a practical organisation within the sector.
In terms of the consultation, I would say I'm disappointed with the way that there was a response to the consultation in saying—. I think something like 90 per cent of respondents to the consultation disagreed with the proposal, but they're saying, 'Well, because of Rent Smart Wales, that got it out to more landlords, so we'll ignore most of the responses.' That’s paraphrasing, I admit, but that's effectively what's happened there. A victim of our own success in being able to communicate.
Thank you for that. Unless there's anything you want to particularly add to that—is that a fair summation?
Thank you. In which case, perhaps I could ask—that issue of the Welsh Government disagreeing with some of the responses, or the majority of your members' responses to the consultation. It's perfectly within the right of a Government to do that if they feel that there is a problem to be fixed. Would you accept that?
I accept that they can more or less—[Inaudible.]—how they want.
Indeed. So, is there a problem to be fixed?
In the sense of ignoring the consultation or in terms of the wider—?
In terms of what the Government has identified in bringing this Bill forward in terms of no-fault evictions.
No, we don't believe there is. This is something—there is very little evidence that has been put forward. I accept there is very little evidence on this; it's one of the problems we have in the sector that we don't have good, reliable data. We do have, however, court data of a very small number of evictions under the section 21 process.
Yes, I do entirely accept a Government may legislate on any issue it so wishes at any time, but you've had a democratic consultation put out to the people of Wales, the results of that consultation were that overwhelmingly they didn't want the Government to do what they had suggested. Therefore, one could argue: do you have a democratic mandate based on the results of your public consultation?
I understand what you're saying. The difficulty with that is—both Dawn has referred to it as I joined the committee this morning, and I've certainly had instances in my own office over 15 years of people coming in where there has been an abuse of no-fault notices. I know the Minister previously in evidence, Chair, referred to anecdotal evidence, but it's more than anecdotal—it's real life, we just don't know how big it is. So, could I just ask for your feeling on the robustness of the Residential Landlords Association research on the use of no-fault notices? You've absolutely said there's a difficulty here with the evidence, but how robust was that? Because that did form part of your submission, and it has been criticised for not being quite robust.
Yes, it's been criticised by an individual—the methodology was set by that individual, so it's interesting. But they've moved on to a rival data set, so I understand they want to detract from this—what is probably the leading source of landlord data at this point in time.
But if I could just very briefly go back to your point about the case load, I am fully sympathetic with it, which is why I entirely agree that something needs to be done. Landlords will not tend to come and see you, and I think that does need to be remembered, that you're probably only getting one half of the story.
I do actually have landlords—in my 15 years I've had landlords come as well, because of difficulties with problem tenants. I've had far more tenants who, in that power relationship, have had to come to me as a last resort.
And I do understand that, but I suppose the point is that I agree with a change, but this is the wrong change. I'm just asking that we make the right change, which keeps the balance.
Back to the data—something, again, we've been asking for for a long time—I think in 2014 we put forward in an RLA manifesto for the election then something around getting better data within the sector, and it's actually a spur of why we set up RLA Pearl, which is our semi-separate research section, and we do collaborations with universities and other data collectors, and we are in the process of getting accreditations around the market research data as well to improve that. We've taken that on board because we are making legislation on anecdotal evidence too often in this field. So, I am absolutely not saying that we are the gold standard of data within the private rented sector, but I'm saying that these are not insignificant surveys. We're not talking about a poll of 100 people—we're talking about 6,000 respondents to this survey, and the results are pretty overwhelming.
But I think just to be clear for the committee, we can't have full confidence in that because of the issues around how robust it is. It's as good as perhaps you can get from a members response survey, but we cannot regard that—in the same way that we cannot regard anecdotal data as empirical, neither can we regard that survey as definitive.
It's not definitive, but then no data is definitive. I sit with the Valuation Office Agency and the Office for National Statistics, and they are constantly revising how they take that data and represent it. I have a background in academia, and did a lot of data analysis myself. So, I'm not at all saying that, but it is more robust than a general survey, I will say that. There is strong methodology, we've got proper researchers behind this, and we do this in collaboration with universities as well. We've been delighted, as I've offered before to Welsh Government, to work on things like this and see if there are ways that we can improve the data structure and get more data, leveraging our resources.
It is what it is, and I think it should be taken seriously, but obviously the gold standard would be a randomised sample, and it's not that. We have to settle on that, perhaps.
I entirely agree with that.
Can I turn to the issue of costs? The regulatory impact assessment that's in there—is that a fair reflection of where the costs would lie? Do you anticipate there will be further costs on landlords because of this?
I think they do underestimate what the overall costs will be because they ignore legal costs. We've got to remember that this is new legislation, so at the moment we are operating in a realm that we've had for 25 years, 30 years, and there's a lot of case law already established. We know how to operate these things. People still get it wrong, but it means that possession timescales are as quick as the courts will allow. I do think that there will be serious issues with increased pressures on the court system and therefore, actually, the average length of time for possession cases will increase quite considerably, unless we look to up-resource the court system, which probably isn't going to happen.
Okay, thank you. Some witnesses have suggested that we should actually, if not now, in the future get rid of no-fault evictions entirely. Would you agree with that? And whether or not you agree, what impact do you think that would have on landlords and on tenants?
No, we don't agree that you should get rid of no-fault evictions entirely. The concept of what has become knows as the 'no-fault eviction', section 21 or section 173 of the Renting Homes (Wales) Act 2016, is the catch-all that exists in so many different pieces of legislation across criminal and civil legislation that we cannot hope to enshrine in a piece of legislation every possible situation where, in our case, a landlord may need to regain possession. The 17 grounds under section 8 of the Housing Act 1988 and the grounds under the Renting Homes (Wales) Act codify the main reasons and the ones most often and most likely to be used. But we cannot hope to sit here today and say, 'These are the only reasons, over the next 30 years that we want this piece of legislation to exist, that will be needed.' Therefore, I think there will always be a need and, where that need doesn't exist, a landlord that gets themselves into a situation where they can't easily regain possession of the property will then get rid of that property. That, then, produces two situations. One situation is that that property leaves the private rented sector. The other problem, and I would say a worse problem, is that it doesn't leave the private rented sector, it goes into the hands of a less scrupulous landlord who will simply ignore the law, at which point stock doesn't go down but quality of property and of management standards do and problems later down the line with more criminality in the sector go up. I would say that that's exactly what we saw last time when these sorts of laws were implemented. We certainly don't want to see a return to the Rachman era.
So, why do you think that so many organisations, including those that deal with homelessness in Wales, are so adamant that we should get rid of no-fault evictions, if not now, eventually? Because they have front-line experience; they're dealing with these cases day by day and they are clear that it needs to go.
I think it comes down to actually something that both you and Ms Bowden have said—they are the advice agencies. People go to them and they go to you when they don't know what to do. So, the advice agencies see the very worst of the very worst. That I don't deny, but they don't see the vast majority. Similarly, I'm sure no tenant has ever come to your surgery and said how fantastic their landlords are, because why would they? Therefore, they see the very worst. They see the bottom end of the sector, the landlords and agents we want to get out of our sector altogether. So, I can totally understand where they're coming from, because that's what they see day in, day out.
They're seeing a real problem.
They see the very worst of the worst. They don't see the 90-odd per cent where tenancies are absolutely fine.
Okay. We must move on. Dawn.
Just briefly, Chair, because I think it follows on from the earlier questions. Two things, really: is there evidence that changes to no-fault evictions might make landlords less likely to let their properties to vulnerable tenants, or is that just, again, a sense that you might have?
From our survey—whether you want to have faith in that, or not—. Just a very quick comment on that, we have submitted a full rebuttal to the committee around the comments that were made there and, if you've not seen it, it's quite a detailed response that will hopefully allay some of your concerns.
It's been circulated to committee members.
Great. Fantastic. I just wanted to check. Thank you.
There's a huge swathe of landlords—I think it's 80-odd per cent—who are saying that the less certain they are about being able to recover their property in difficult situations, the more likely they are to be more selective of the individuals that are going into their property, to the point where many are saying they would rather have voids on their properties than selecting the wrong individual. So, it goes against some of the main focuses of what Welsh Government has been doing over the last five or six—or longer—years in trying to widen the access for the private rented sector. That has been an area that I've really strongly tried to support as well through some of the work we've been doing with third sector organisations. And I just feel that, on one end, the Welsh Government is creating legislation that is driving landlords out of the market and away from the sectors that they want to house, and then, on the other side, they're saying, 'Can you take some of our most vulnerable tenants in society?' So, we need to make these adjustments. And I'll go back to we need to look at this as a wider picture. We need to be making proper changes that are going to reinstate landlord confidence on the one end, to be able to make sure that we are achieving the objectives of Welsh Government on the other end. And that's all we're asking for, really: less of knee-jerk responses to things and more long-term strategic partnership working to achieve the objectives of Welsh Government.
Given that I'm somebody who's campaigned on this for a number of years, I don't think it's knee jerk; it's been going on for many, many years.
I say 'knee jerk'—. And I've been working on the wider picture since I was brought into the RLA in 2012, so—. What we've done is we've picked one small section rather than looked at the much wider picture. That's why I say about the knee jerk—it was a response to what was happening in England. But there is a wider picture here and we need to put all these pieces of the puzzle together for it to continue to work.
All right. I'm very conscious of the time, Chair, so I will try and move on.
I just wanted to come back to the point about the court possession process, and I think both of you have said that you've got concerns about how quickly you can get through that and whether that needs improving. Can you expand a little bit on that and say what you think needs to improve to ensure that you can take possession—once you're in the system, you can take possession more quickly?
I think there are a few aspects on this one. Firstly, and this is no fault of the judges themselves, but the judges in the county courts are civil judges; they deal with every type of case. They're not housing specialists, and therefore even if we could speed up the processes and get to court faster, one of the cost elements for both sides—one of the intimidating elements—is the judge is not necessarily going to know the law themselves, therefore you have to actually explain the law to the judges. If we can have a specialist housing court with specialist housing judges who are trained, we're going to create much more consistent judgments, because that's all they do. We're not going to need the level of cost of lawyers explaining the law and the case law to judges. It's why we've been so supportive of the concept up in Scotland, and that will almost kill two birds with one stone, because it will provide speedier access to justice because there will be churning through the cases faster, because they won't need to be explained to the law, and it'll also produce much more consistency in judgments. Because you can go to a court and, depending on the judge you get, you could have two wildly different outcomes at this moment in time.
So, it's why we're supportive of this concept for that aspect. There is also a process issue. The courts are just overwhelmed at this moment in time. We need to do something to actually speed up the court processes and timescales themselves—for example, possession claim online. We are in the third decade now of the twenty-first century—yes, we are in the third decade of the twenty-first century. Why are we not doing it online? Why have we got still an arcane possession claim online system that hasn't been updated since the early noughties? That can stop a lot of the silly admin errors. We've got it with money claim online; that system has been updated. So, let's try and use technology to speed up the processes. And, particularly, I would suggest, and we're arguing, with the mandatory grounds for possession, do we really need court hearings going forward, when—as long as the landlord can prove that they've done it correctly, that the mandatory ground, whatever it may be, has been passed, do we really need a physical court hearing? That could save a lot of time that can be diverted to the more serious cases, or where there is a defence involved. If it is a purely paper-based exercise, do we need the expense of getting everybody into court just for the judge to go, 'Yes. Yes. Yes. Bang'?
Okay. I understand the rationale for that.
Dawn, if it's okay, I think we need to move on to other—.
We do, yes.
Delyth, if we could move on to some of the specific parts of the Bill and perhaps start with the six-month notice period.
Yes. Diolch, Cadeirydd. I think it's probably fair to say that neither of you in your evidence have suggested that you're particularly happy about the move to a six-month notice period, but that you also have recognised that the two-month notice period may need to be addressed. What do you think would be the alternative that should be looked at, knowing that we—? I think, David, you said earlier that the concept of security of tenure is an interesting one.
I'll let you go first on that one.
Okay. So, I'll restate my line of we'd rather see a housing court tribunal system. Actually, on Dawn's point, it's not just about possession proceedings, in our view, a specialist housing court or tribunal: it's about access to justice—so, from the landlord and the tenant side, about enforcing tenancy rights and responsibilities on both sides so, actually, we can try and avoid getting to the possession part. And that will be the real strength of a tribunal system or a housing court. And that's actually where I think a tribunal is better, because you don't need lawyers—in fact, I think they often detract from a genuine settlement and a mediation process. And that, I think, will be the real gain that we can get out of it, and that's what we should be working towards. But let's assume that this goes ahead as it is.
So, there are some amendments that we think entirely achieve what the Welsh Government is trying to achieve, whilst also tweaking the market for—yes, admittedly, it'd be more city-centre-style renting, but it will really give landlords a bit more confidence. And, at the moment, you've got the six-months minimum term, and then you can only serve six months' notice after the end of the fixed term. We are saying two principal things. One is that, at the moment, you can only serve that notice on the day, on one particular day, and you have to do it by hand, to be able to maintain a one-year tenancy. I think that is not suitable for anybody, really. So, what we're asking for is a period of time in which the notice can be served, and then take effect after the six months.
The other thing that we're looking to do is say, 'Can we serve the notice within the fixed term, but still have a minimum period for the tenant of 12 months?' Because, effectively, what we're creating through this is a 12-month tenancy. Because, at the moment, the landlord has a choice of either saying, 'I'm going to grant you a six-month tenancy; I'm going to serve notice at six months to end the tenancy at 12 months', or 'I'm going to create a 12-month tenancy, and then I can only serve it at the end of 12 months', which, effectively, could create 18 months. So, that just creates a huge level of uncertainty. When you look at city-centre models—and I'm not just talking about students, although it's very important for students—you want an efficient market there; you want houses to be used as effectively as possible, and you need a certain certainty that a tenancy is going to end at that time. And I think it's only a minor change overall, but I think it will make a really big difference to whether we can actually say, 'Okay, well, we don't like this period of time that we're talking about, but, actually, in the grand scheme of things, compared to what's going on in England, compared to what's going on in Scotland, we've got a reasonable deal.'
And I think I just—. I would agree with that. That's exactly the approach that the Westminster Government took in the deregulation Act. It was two months and a minimum of six months, but it couldn't—notice could expire—. It could be served during the tenancy, but couldn't expire until the end of the fixed-term tenancy, and I'd support that one. If we are going to continue with the six-month proposal—and we don't support the concept of the six-month proposal—I think there's a few other things that we might need to look at in the actual grounds of possession: so, particularly, a landlord intends to sell their property, a landlord intends to move into the property—we've already discussed the mortgage lender—or a member of the landlord's family needs to move into the property. So, those aren't in the current renting homes Act, and, if we are going to go to that, you could end up with a landlord presenting as homeless because they can't get back into the home that they actually own.
Thank you for that. The Minister has said that the reason that no-fault evictions have not been abolished is because it could contravene the landlord's human rights. Can you point to any part of the Bill at all where human rights law could be contravened?
So, I know we got this question yesterday from your very helpful committee clerks. I'm afraid, certainly from ARLA's perspective, yesterday the coronavirus took such a turn that we had to take the decision to cancel our large national conference, which is taking place next week. So, I have not had enough time—
You're very welcome to write to us.
If you could write to us with that, that would be really helpful.
If you don't mind. And my understanding is that we actually look at it more as an expropriation issue, which in this country has been illegal since Magna Carta, whereas those sorts of protections don't actually exist in other European countries. And landlords in other European countries have used human rights legislation in order to overcome the expropriatory effect. However, I wouldn't want to mislead the committee, so if I could write to you with more details—.
That would be very helpful.
That would be fine.
Could I ask—do you think that housing is a human right?
The right to—
The right to housing, a house.
As I understand it, it is not—
No, but do you think that it should be?
Should the right to a roof over your head be a human right?
I think yes, it should be, but then the question is: whose duty would it be to provide that roof?
And you would agree.
Yes. It's a difficult question to answer in the period of time that we have currently. In principle, yes, but it comes with 100,000 caveats.
[Laughter.] Okay. You're welcome to right to us with the 100,000 caveats.
Well, perhaps just one or two of them. [Laughter.]
Or perhaps one or two—we'll leave that to your discretion. In terms of when a landlord can give notice, do you think that the six-month restriction on serving notice at the start of a periodic standard contract is appropriate?
I think we've kind of addressed that one with—. If the aim is to have a 12-month as a minimum, allowing a—
Fair enough, actually. Allowing for time then, yes, I accept that point. Is there anything that you'd like to add in terms of the restrictions on the use of break clauses in fixed-term contracts, and what difficulties that introduction might cause for landlords?
At the moment, break clauses aren't really used. However, under the proposal I've put forward, I think tenant-only break clauses would be a really useful tool in creating—. Because, at the moment, we've got Erasmus students—things like that—who just need three-month terms, or people in between house moves. There are lots of reasons why shorter terms would be useful. And I think—. As it's written, they're not going to be used, particularly. But, with the small amendments I've suggested, I think they could be a really powerful and useful tool, particularly if it's something that the Welsh Government promoted once it was established.
Again, we actually discourage the use of break clauses, and it's not something that's contained within our standard tenancy agreements. But there are—. Again, it goes back to my original point about the need for flexibility. And, in the use of a break clause, a tenant can very easily enforce the break clause—they just leave. If a landlord needs to enforce a break clause, there needs to be a mechanism for them to actually be able to enforce the break clause if the tenant doesn't leave.
Okay. One final question—you don't even have to answer this if you don't want to; it's more of a plea. I think at the beginning, David, you said that the problem that the Bill is seeking to address is more of an emotive issue than an actual issue. The evidence that we've had from Citizens Advice has pointed out that it can cost people more than £300 to move. So, do you recognise that, sometimes, it is more of an actual issue for people than an emotive issue?
The cost of moving, yes, is expensive—for both sides. Landlords have void periods, they have churn costs, including letting agent fees, as well as preparing the property for a new tenant. So, there are costs on both sides, which is why landlords want long, well-maintained tenancies, agents want long, well-maintained tenancies. So, yes, absolutely, but I would say those costs equal out on both sides.
I think we have to go back to the core principles, that landlords are not—. No-fault eviction is a great spin, marketing spin, on what a section 21 is: it's a notice with no reason given, and that's what's got to be—. It's not that the tenant hasn't done anything wrong; in the vast majority of cases, it is rent arrears that landlords are claiming this on, or antisocial behaviour. So, we have to remember that that's the core principle. If we can get back to my main plea, that we look at a housing court and rebalancing in a wider Bill, then we can get around a lot of these issues.
Thank you. I'm aware of time, so—.
Yes. Okay. We'll continue for a further five minutes. David.
Yes. I just want to look at the issue of—. A no-fault notice expires, right, but it's not carried through. You then have to wait another six months before you can issue another six-month no-fault notice. This, we're told, is to stop a rolling process of 'just in case' notices. Is that a fair constraint?
I think there needs to be, probably, amendments to this section, mainly on the basis of technicalities or issues in service of notice. Because, actually, if a landlord makes a mistake—which I admit, under renting homes changes, should be reduced because we're removing a lot of the bureaucracy. But mistakes will still be made, undoubtedly, especially because it's new legislation. You could end up with the fact that landlords could be trying to get possession of their property for nearly two years, if they make an initial mistake on their section 21, or section 173 as it'll be then. So, I think we do need to make changes around bureaucratic errors or issues with how the notice is served, as opposed to principally, 'Somebody has done something wrong'. But I do get the reason why you can't keep serving notices and agree to achieve this. And it also facilitates my amendment as well by keeping that in. So, you shouldn't be in a position where you're constantly under a rolling notice.
I'm conscious of time—
So, for a technical reason—it's just an error and then you have two weeks to identify and then you can reissue the notice—what would be a reasonable period if two weeks is insufficient?
We are arguing for 28 days, to ensure that there is sufficient period of time once notice is served. Very often, local authorities will write back once they've received a notice, or some of the advice organisations will write back, saying, 'You've got a defective notice.' They won't tell you what it is, but that's likely to take longer than two weeks for that to happen. But ultimately, if we talk about errors—more if we can change it on the other end, in that if it's a genuine service error or technical issue that actually allows the re-serving of a section 21, rather than instigating this six-month ban, then I think that's a more reasonable approach to this.
I would agree. Similarly, going back to my point earlier about the use of technology, the technological solutions that could be implemented that will, I can't say eliminate, but will prevent as much as possible these sort of errors being made; at the very least prescribe forms, like they've created in England, with the form 6A for the section 21 notice, which has reduced the number of errors.
And my final question is on an important, large and very particular market, and that's students. At the minute, it's a standard one-year contract. How is that going to work out under the proposals in the Bill?
I'm very concerned about that market. The fact is that, obviously, we don't necessarily want to isolate students, because defining students is an incredibly difficult thing to do, but we do have to remember that they have a disproportionate impact on a city or an area, because of the life cycle in which they come in. I don't say that that impact is negative; it's just disproportionate because they all turn up at one time and they all tend to leave at one time. So, therefore, the housing stock has to be focused around catering for that, otherwise, you're going to come up with some real issues in housing the people when they arrive. And as a consequence of that cycle, city centres are generally on that sort of cycle as well. So, it's not just the students; it's usually young professionals for some period of time afterwards.
So, the Residential Landlords Association proposal on the amendments, I think, really does help cater for that, and that's why we're really strongly saying that we really urge the committee, certainly, to look at it and examine whether they think it achieves Welsh Government aims and advise Welsh Government, if they agree with it. We're happy to go into more technical detail, bearing in mind that we are in a committee and it can get quite technical trying to explain the differences. It looks very small, but it makes a really big impact, particularly to that market and city centres in general.
Won't it just operate naturally at the minute? How real is the threat that some students would hang on for a couple of months, and then your cycle really is disturbed?
It has happened in Scotland. I accept, not to a huge extent, but for a single private landlord that operates with one property in the student market, if they break that cycle, they don't get any rent for potentially up to 12 months. So, in the same way that losing a house can have a devastating effect on a tenant, losing that cycle can have a similar effect on a private landlord.
And it also means you're not just impacting on a landlord, you're impacting the next set of tenants as well. Because, very often, these properties will be pre-rented for the next period. So, it's a significant—. There is a risk there already, I completely agree, but that risk is really decreased, because 99.9 per cent of the time, the notice is already served to end that as a security measure. So, therefore, the notice will expire and it's straight to court. So, therefore, that whole process is severely concatenated.
Okay. Thank you very much. Thank you both for coming in to give evidence to the committee today. You will be sent a transcript to check for factual accuracy.
No problem. Thank you very much indeed for your time.
The committee will break until 10:40.
Gohiriwyd y cyfarfod rhwng 10:35 a 10:43.
The meeting adjourned between 10:35 and 10:43.
Okay, welcome back, everyone, to this meeting of the Equality, Local Government and Communities Committee. We continue taking evidence on the Renting Homes (Amendment) (Wales) Bill with our fourth evidence session, and I'm very pleased to welcome Rob Simkins, NUS Wales president, and Dan Wilson Craw, director of Generation Rent, joining us via Skype. Welcome to you both. Perhaps I might begin with a few general questions. Firstly, do you consider there is a need for this Bill, and if so, why? Who would like to begin?
I can go, if you like.
So, is there a need for the Bill? In a word: 'yes'. From our perspective, the reason why is that no-fault evictions are causing damage and distress for students now, so anything that we can do, the sooner the better, to increase security for my members and tenants, given the particular challenges that the student market faces.
Okay. That's admirably succinct. Dan, would you like to add anything?
We campaign throughout the UK, and when it comes to security of tenure for private tenants, there are a few tests that we have. The first is: as few evictions as possible. We want to see tenants who are evicted through no problem of their own to have the minimum possible upheaval to their lives, and we want tenants living in their homes to have confidence and trust to interact with their landlord and request any repairs that need doing. So, there were measures in the 2016 Act that improved protections from retaliatory eviction, but they obviously haven't been implemented yet. But, from our perspective, that places too much of the burden on tenants and relies on tenants to challenge any eviction in court if they think it's of a retaliatory nature. And so, we need to see greater protections, a requirement on landlords to demonstrate that they have grounds to take back their property, but then also to nudge them into not doing it in the first place. So, there is a need for the Bill for those reasons. But, yes, the detail of it we would have further thoughts on.
We'll come on to some of the particular provisions in due course. You mentioned, Dan, that the 2016 Act isn't yet commenced. Do you agree with the approach of taking forward this legislation without that 2016 Act having been commenced? Or would it have been better to have seen the impact of the 2016 legislation first?
I think given the experience of Scotland and England who have made changes to tenancy law already, there is a strong case for acting now before implementation takes place, because, in England, when they brought in protections from retaliatory eviction, tenants essentially were relying on their local authority to come in and inspect their home and when they identified disrepair or hazards in the property to then serve a notice on the landlord, which would then give the tenant protection from a retaliatory eviction. And so, I think there's a similar risk of just relying on that in Wales under the 2016 Act. Given there's an opportunity to go further and create added protection and added incentive for landlords not to go down that route, it should be taken sooner rather than later.
Okay, thanks for that. Would you add anything to that?
No, we agree as well that it should be now. As we mentioned earlier, these are issues facing renters and students that are affecting them now. So, we would support amending sooner rather than later. I think surely the core focus of housing policy is preventing homelessness, so why would we not take this opportunity to do this now?
Okay, thanks for that. In terms of that 2016 Act again, would you say there is a reasonable level of awareness amongst tenants that that Act is on its way?
It's difficult to say, though acting honestly, probably, I would expect among students, 'no'. And I think that probably speaks to the wider complexity of the housing sector for students to have to interact and engage with, more so than this particular issue. We do our best to raise awareness and students' unions do their best to raise awareness as well, but I think this probably speaks to the wider complexity of the sector and more work needs to be done by other stakeholders to help clarify that for students.
Okay, Rob. Would you add anything to that, Dan?
I think, even among fairly engaged people who are in our supporter base in Wales, there's limited awareness of the Act and what it involves, I think because the timing of it has been uncertain. There's been more awareness of the end to letting agent fees, which obviously came in last year, which has a more immediate impact on renters' lives.
Yes, sure. Okay. And the final question from me before we move on to questions from other committee members. We've already touched on security of tenure for tenants in the private sector and, obviously, it is very important. What would you say in terms of the impact that insecure housing has on tenants in terms of health and well-being?
For our members, it's pretty fundamental. I think the key thing that we see with security of tenure and security is the fact that so many students live in squalor—for want of a better word—because they're so terrified of having to try and challenge the conditions they live in and facing retaliatory evictions. So, anything that we can do to help strengthen their hand and give them added security will actually probably, in fact, drive up quality within the sector because it will empower those students to then be able to stand up to landlords and fight for better quality for the accommodation they live in without having that impending doom of eviction over their heads.
Thank you very much, Rob. Dan, would you add anything to that?
Yes. I would definitely echo those comments about the tenants having confidence about reporting disrepair and getting things fixed. As tenants get older and settle down in the private-rented sector, or try to settle down, there are other anxieties that arise. So, among people who have got children, who have got jobs in certain areas that they need to be close to, there's anxiety about having to move home. We see much greater anxiety about having to move home among private renters than in other tenures according to polling we did a couple of years ago. So, twice as many private renters are worried about losing their homes to social renters. They're less likely to know people in their neighbourhood, and we put that down to people just not having the certainty they're going to be staying in this particular home and having the incentive to put down roots and invest in their local communities.
Similarly, private renters don't have real incentive to make the place they live in a home. So, we find much fewer private renters than social tenants are likely to feel that their home is how they would like it, and that was something—. When we've asked tenants just to explain what their concerns about being a renter are, a lot of the comments we've had back were about keeping pets, decorating, just having the confidence to have children, and there's even an anxiety that if you're going to improve the state of your property, the landlord might take a look at it and go, 'I can get a higher rent for this', and use that as a reason for eviction. So, those are all things that contribute to this feeling that tenants just don't have enough security, and that needs fixing.
Okay, Dan. Thanks very much for that. We'll move on, then, to David Melding.
Yes. Perhaps I can follow on and ask Dan further: I can see how Generation Rent welcomes these changes insofar as they go from the point of view of increasing security of tenure, but I suppose there's also another need that tenants sometimes have, and that's for flexibility. Are there any traps in the legislation where, in effect, it becomes less flexible and not fully in the interests of the tenants then?
It's essential that the legislation allows tenants to retain flexibility in moving out of a home for the basic reasons that tenants might: their relationships might change with the people they're living with; they might form a new relationship or want to bring a child into their family; they might lose their job, or have to change job and change location at very short notice. So, those are the practical reasons, and tenants need that kind of flexibility that others don't need, because it is their home, and it's much more important. If we're talking about the property, the property is much more important to the tenant who lives there than it is to the landlord, who does have a legitimate interest in the property, but the tenant needs to have security within it: protection from eviction, but also that ability to move out if they need to.
Okay. I suppose there is a market there for fairly short lets. Do you think that will continue, and how is that going to operate, where people may just want to be in for three or six months whilst seconded in a job or something? I suppose some landlords argue that flexibility to meet that need is one of the advantages of the current system that may be lost with these changes in legislation.
If a tenant is only planning to live in a property for a certain amount of time, they should have a notice period that they've signed up to, but there's no reason why that situation couldn't exist with possibly an even more common situation where tenants are wanting to live somewhere for an indefinite period of time.
If I could move to NUS Cymru, you've raised the issue that some in the private sector, some of the landlords, still don't comply with the deposit protection requirements, even though they've been around now for 10 years. So, do you have any fears that the requirements in this Bill, which obviously strengthen the law in terms of the tenant, will result in some landlords adopting irregular practices and not complying?
Yes, I think so. During my last year in university, the student house that I lived in—this was 2017 now—my landlord didn't tell me where my deposit was, or any of my housemates. For all we know, they could have been in a bank that wasn't in a registered scheme, and it took us some chasing to get them back. That's not an irregular story. We heard that from a lot of students. So, students being ripped off is just a normal part of this discourse in this sector, it's taken for granted, it's almost seen as a bit of a rite of passage: 'Do you remember that uni house you had? How awful was it to get your deposit back?' It just seems a normal part of the behaviour.
So, I think the main take away we have from this is enforcement. Last year, we were working with a bunch of other student unions across Wales when a student letting agency was going to go under during exam time. They contacted all of their tenants to tell them that their deposits had perhaps not been protected, during exam time—it couldn't have come at a worse time. We contacted a different range of stakeholders and—again, this speaks to the complexity of the sector—we were bounced between various different bodies of the local authority, of Rent Smart Wales. Trying to get any traction on this was just incredibly difficult, and we were paid experts on this. So, try to imagine a student doing that when they're perhaps looking for somewhere else to live, balancing their work life, balancing their study. So, I think, again, clarity and more enforcement could mitigate against some of the issues that you're talking about. I think that would be our key message towards that.
And in terms of enforcement, do you think these changes would make students more vulnerable? Basically, there's a fear that there's more incentive for very bad landlords, which are thankfully a minority but there are some out there, to in a calculated way pursue irregular practices.
I think that's a legitimate worry. But, if there's a retaliatory eviction and you're fighting that with six months compared to two months, that would empower the students to be able to find some time to access help. If, in six months' time, you know you need to find somewhere else to live that gives you six months to go and access support services and we know that—. Imagine trying to do that within two months, with all the various different other balls that students are juggling. That's a key caveat for us—that it buys you that extra time to access support services in your institution, your students' union, Citizens Advice. And we know that students do know about them, but, I guess, when you've got two months, and you've got deadlines coming up, you're probably working a part-time job, you'd find, 'You know what, I'll pick this up later and I'll just find somewhere else to live.' If that makes sense?
Okay, David. And Huw.
Thank you, Chair. I want to turn to the challenges that there are in hearing the tenant voice, effectively, not only in the development of this Bill, but generally in terms of the landlord/tenant relationship. It's been remarked by people who've come in front of us, including the Minister I think referred to this, the difficulty of them. You can hear from organisations on the landlord side; you can actually hear from organisations like yourselves, representing students or certain segments—the cohesive voice. Would you recognise that? And if you do recognise it, what can be done about it, quite frankly, because it's a very fragmented sector with tenants from families, students, individual professionals?
We would absolutely agree with that. I think the work that people like us and then Shelter Cymru, Crisis and Citizens Advice do, and I would imagine a lot of your own caseworkers do it as well, to pick up data, anecdotally, or more centrally—. I think there's work that can be done there and that, perhaps, an effort to generate more data and evidence on this is needed from somewhere central, that's not from people like us that are having to balance loads of other things. But, again, I think it speaks to the complexity of the sector. Housing, and having somewhere to live and having shelter is a basic human need, as well as your physical and mental health. You know that when there's an issue with your physical and mental health, there's a point of call, a focal point—you go to the doctor, you pick up the phone to the national health service. That does not exist, and from our experience trying to deal with student casework and housing, you get bounced from pillar to post. So, having—. In terms of what can tangibly be done, from our perspective, and we understand if this is perhaps a bit blue sky for a Thursday morning, but one focal point—
There are blue skies at the moment. [Laughter.]
Yes, I know, maybe it was that; they'd planned that, I'm sure. [Laughter.] Having one focal point, or having one point of contact where students or any renter knows that they can go and access support and have answers to any questions—I think that would be a really positive step and move forward, and it would actually probably increase engagement and awareness of housing and help that tenant voice to shine through.
Okay. Could I turn to our colleague on video for any thoughts on this—the difficulty of engaging with tenant voice on a Bill like this?
As Generation Rent we have a UK-wide—. We're a small team and we have a very national focus, whereas key pieces of puzzle, key pieces of solution is for tenants to have local networks that they can get involved with, either to get advice or to do their own campaigning or be involved in campaigns, and influence the Government, the National Assembly and so on, and their local authorities as well. There are challenges because, generally speaking, the younger you are as a renter, you're more likely to be moving around quite a lot and not building those local connections. As you get older, you might be encountering more of the difficulties with being a renter, but just not having the time to volunteer with a local group, especially if you've got kids, and so there are structural barriers to tenants organising. That said, there is a growing renters movement within the UK—there's a renters union, a community called Acorn that has set up in Aberystwyth, I believe, and they have a branch across the Severn in Bristol. There are groups like that that could and should develop to provide that tenant voice.
Okay, thank you. Could I stay with you for a moment, just to move on to the evidence that we've heard from the Minister and some other witnesses that much of the evidence, particularly around no-fault evictions, is anecdotal—there just isn't the data there, the hard data? Would you agree with that, and if so, do you have a take on how extensive the issue is of the abuse of no-fault evictions? If I could ask you, Generation Rent, first of all.
A lot of the evidence base—there's testimony from landlords and tenants, and obviously there's a lot of survey evidence that's used, probably more in England than in Wales, given that there's the English housing survey, which is quite comprehensive. The Ministry of Housing, Communities and Local Government produces its quarterly possession statistics, which give some indication of how common no-fault evictions are, and we've found that, historically, no-fault evictions are quite closely related to the wider demand in the housing market. So, as house prices and rents rise, you'll also see no-fault evictions rising, and that's an indication that landlords are feeling more confident in getting a new tenant who can afford higher rent, or having confidence to put their house on the market, and that's fuelling evictions. Similarly, at least in England over the past couple of years we've got a new data set on homelessness, and we're finding that about 10 per of cases in England arise through no-fault evictions, and that's specifically where the tenant isn't at fault and the landlord is selling up or re-letting the property or evicting a tenant for complaining. Again, it's only a snapshot of the situation and it only shows households that are actually ending up as homeless, so it's patchy, and I think that's because of the nature of the eviction system that we have, in that landlords don't have to report when they serve a section 21 notice, so there's no way of knowing—it's only when they reach the court system that they start getting recorded by the Ministry of Justice.
Thank you, that's helpful. Did you want to add anything from NUS Cymru?
I think I'd echo that. The fact that the evidence is anecdotal is in itself probably a problem, and again speaks to some of these wider issues we've covered. I think one of the things I would like to add to that is that this might not be happening to 99 per cent of renters, but for the percentage that it does happen to, the impact is so severe that I think even one is one too many. So, I think that's the key point that we would probably want to make.
Could I just bring Delyth in at this point?
Very quickly, diolch, Cadeirydd. Dan, that 10 per cent figure—that was England only, was it? Or was that England and Wales? England only. Have you sent that evidence to us, and if not, could you send it to committee? I know it's England only—
—but it would be useful to see whether we could obtain similar findings for Wales. Thank you.
Okay, thank you for that. Okay, Huw? Dawn.
Thank you, Chair. I think, to a degree, some of these questions have already been answered when you responded to David and Huw, but could I just be clear? Certainly from an NUS point of view, the six months you think is a good move if we are to retain no-fault evictions—that we keep the six months—and you've explained the reason why. Do you think that presents a reasonable balance between the rights of a tenant and the rights of a landlord? Do you think that redresses the balance in terms of where we are now?
Six months for us is better than two, for sure. Though we absolutely maintain that if there's not a fault, then no-fault evictions shouldn't exist in the first place. I understand the point about balance, and the Minister has said that this seems to be drawing tension from both sides, and therefore it's probably the right course of action, but I think we would absolutely prefer to see them just got rid of altogether. Six is better than two, let's put that on record quite clearly, but, yes, we would absolutely prefer for them just not to exist whatsoever.
Is that your position as well Dan, is it—abolition better than extension of the notice?
Yes. We would support just scrapping any evictions that don't require grounds. In terms of the length of notice period, this is something that our supporters care a lot about. The longer the notice you have, the better. I think a couple of things to bear in mind on that are that, if you're a tenant and you manage to find a new place to live within a couple of months, you should be able to move out without incurring a penalty or having to pay rent for the rest of that six months. But, equally, there's also an issue where the tenant is just unable to find a new home, and will rely on the local authority—to present as homeless to the local authority to be rehoused—and that six months would provide a lot of uncertainty, so that's something to be aware of. But generally when we've asked our supporters, six months is a popular length of time, obviously with the caveat that we should have as few of these kinds of evictions as possible.
Okay. So, on that theme, both Scotland and England, of course, are moving towards the abolition of no-fault evictions altogether, so I take it from what you're saying—you've already been very clear, Rob, that you think that no-fault evictions should go—Dan, is that your position as well? And for both of you, what would be your key rationale for wanting to do away completely with no-fault eviction, assuming that that's what you think is the way to go?
I understand that the Welsh Government is seeing the differential between six months' notice for no-fault evictions and a shorter notice period where there are grounds to evict, and the rationale behind that, but requiring a landlord to actually have a reason for evicting and be able to demonstrate that in court, allowing them to be challenged on that by the tenant, is important. It creates accountability for the landlord, and it gives the tenant some dignity and recognition that this is their home that they're losing. I think we would go further—ideally, when a landlord wants to sell, they should be selling to another landlord and allowing the tenant to stay there. If the landlord needed a home, then they don't need to move into someone else's home. We want to see a system across the UK that makes these sorts of decisions much less—. When a landlord makes these decisions, the obvious choice should be that they allow the tenant to stay in the property, so that results in fewer tenants actually losing their home, and having an appeal.
I think there are obvious examples where this could be necessary, for landlords to re-take. Again, with faults—. Actually this is really good timing, because this might well be happening to me fairly soon. I found my flat on Zoopla. I've never seen it look so clean. But students are reasonable. We understand—we don't want landlords to become homeless, too. But at the same time, the process by which this has to be carried out must be clear, it must be transparent, it must protect tenants, and it has to be something that can't then be exploited as a loophole by landlords who want to then just evict tenants anyway, for example, then increase the rent and get someone else back in. It has to be really clear, it has to be transparent and it has to protect the interests of tenants, and students in particular.
Sure, I understand that. That's very clear. Can I just ask one question, particularly to you, Rob, in terms of the position of students at the end of their tenancy? What might students need to do to stay in their accommodation at the end of an academic year? Because when we had the Minister in, and we raised the issue of students getting caught up in no-fault evictions and so on, and she said they tend to go at the end of the academic year anyway. I guess for most that is true, or for large numbers, but what would need to be done if you wanted to stay in our property beyond the academic year?
I think there are many reasons why students would either want to leave or stay, and I think particular attention here needs to be paid to students who are care leavers and estranged from their families. For a lot of these demographics—and they might not be vast amounts of students, but they're still as important—they might genuinely have nowhere else to go, and so I think, regardless of what accommodation they're in, there needs to be some sort of safeguard set up whereby they aren't just timed out and off they go.
We shouldn't be making an assumption they'll just go back to family.
Exactly. I think the communication point on that is key, and, again, the transparency and accountability. For some students, moving house is an expensive process. You have to save up for a deposit. Even if you're house sharing and the deposit is £200 or £300 per person, that still requires an element of saving, even with our lovely Diamond finance. I think—yes, it needs to be properly worked out, done in partnership with students, if there is any process created by which students can opt to stay longer if they need to. We need to be part of that discussion, but I think it needs to be clear, transparent, and, again, make sure that it's accountable to all, if that makes sense.
Okay, that's fine. That's okay. Thank you, Chair.
Okay, Dawn. And Delyth.
Diolch, Cadeirydd. Rob, I think it was you who said earlier—forgive me, Dan, if it was you, but I'm sure it's something you would agree with as well—that the core focus of housing policy should be about preventing homelessness. So, this is a question for the two of you—do you think that there should be almost a human right to housing?
I know that it's not within this committee's gift to determine what is a human right, it's just do you think there should be more of a rights-based approach to this?
It's a basic part of human need, so, yes, absolutely. I would agree that there should be a right to housing.
And, Dan, is that something that you'd agree with?
Yes. We would support that.
Rob, I know that you have said that the Bill—. Well, it's not just some of it—the Bill, as drafted, it does provide exceptions for higher education institutions, the accommodation that's let by them, and NUS Cymru have argued that that provision should be extended to purpose-built student accommodation as well. Could you talk us through why that would be? Anything else that you'd want to add to what you've already said?
So, I think there needs to be more—. I think the real reason for that is actually that purpose-built student accommodation is a—. Well, in Wales especially, especially in places like Swansea and Cardiff, it's a huge growth area, and actually it needs to be looked at in more depth and detail than just this amendment to this Bill. So, I think that what we would want to flag here is actually that this is a real area of not concern, but something that we need to be keeping a close eye on. A lot of these are towards the luxury end, they're quite expensive, and I think that it needs more care and attention than just this. So, we would argue for a greater spotlight to be shone on that than just this area, which is probably the principal reason why we've responded in that particular manner.
No, no, that certainly makes sense. Shelter Cymru have—. Well, in response to David Melding, you have both responded to the fact that there's a danger in some limited cases that some provisions in the Bill could lead to the harassment of particularly vulnerable tenants. So, what role do you think there is for the Welsh Government, for local authorities, for Rent Smart Wales, to help tenants, whether students or otherwise, to be made aware of their own rights?
So, I've said it multiple times, but I'll happily say it again: I think the complexity of the sector is—and the difficulty to navigate it as a tenant, and especially as a student tenant who might not have a lot of experiential history with letting as a tenant—. I think the complexity needs to be resolved. But I also think, in terms of raising awareness, working with people like us, a lot of students unions are spinning multiple different plates, and they act and advocate for multiple different areas with, honestly, not a lot of capacity. For my students union, we had one caseworker to deal with roughly 10,000 students. It's a lot to expect that person to be able to be an expert across a various different range of trades. So, I think a tangible action could be for Welsh Government to work with stakeholders and work with experts and to actually upskill people, and I really think there's an appetite within students unions to actually take that on. A lot of SUs are having to deal with this more and more frequently, it's taking a bigger part of the workload, but it's not something that they've necessarily always encountered. So, anything that could be done to upskill the people who are helping to advocate for the students in these areas, I think, would be really welcome, and there's absolutely an appetite for it.
Thank you. And Dan, is there anything that you'd add to that—whether it's a role for the Welsh Government, for local authorities, Rent Smart Wales, or any other bodies that you think should take on more of a role to help educate tenants of the rights that they actually have?
Yes. I suppose there needs to be joined-up approach, really. So, obviously Rent Smart Wales is a body that we don't have an equivalent of in England, and so I think it's important for tenants to understand what the local authorities can do and what Rent Smart Wales can do, and, whoever they approach first, there's some clarity about what they can expect from each.
We've done some work in England, looking at councils and how they communicate with tenants, and there's a lot of very opaque websites. It's not clear, if you're a tenant, what to do if you have disrepair. It can get very difficult to understand that your council can actually act on your behalf and inspect a property. But there's a lot of best practice out there, there's a lot of councils that are doing a really good job. One thing we're doing is working out what that is and how other councils can adopt it, and, really, just make what communication they have with tenants much clearer, manage expectations, and let tenants take action, where they can, and understand what their rights are.
Thank you. And when you were talking about a joined-up approach—. So, we're about to be taking evidence, in a little while, from some of the third sector organisations like Citizens Advice, we've already mentioned, Rob, about who—. Often, tenants who are in a particularly vulnerable position will go to them for help. So, do you think that there should be more of a formalised way in which local authorities or the Welsh Government should be linking up more formally with organisations like Citizens Advice so that the advice that's given is almost—I know it can't be uniform advice, because no two cases are going to be the same, but they're going to be as joined up as possible?
I think, from our perspective, a really short study that we did in my previous institution showed that the vast majority of students will go to their institution or go to their university or their college and their students' union before they then try and look wider. And then, often, it's family and friends, Citizens Advice and Shelter Cymru, and these different third sector organisations. So, I think anything that can be done to help signpost is absolutely welcome.
But what I would say is, if we are going to be doing some stuff to upskill and join up the approach, don't leave out educational institutions. They probably won't thank me for adding something else to their plate as well—for universities, I would imagine, and colleges—but I think it's really important they're involved in the conversation. Because we found, and it was only a sample of a few hundred students, but they would go to their university first, to their accommodation department, and be like, 'Look, I'm having real problems with my housing. Can you help?' And, again, capacity's a problem, but at least if they're clear that there's a group of people within different organisations working on this as a collective, then they can also signpost and help divert where capacity is stretched.
Thank you. The final question I've got is about, well, specifically about, how the 2016 Act allows landlords to specify periods when—this is about student accommodation—standard contract holders would not be in occupation of the property. The Welsh Government has said it intends to allow higher education institutions to use this provision so that conferences can be housed in that accommodation. Do you think that's appropriate?
Look, it's a pain having to move out of your student flat to make way for a conference, but, equally, conferencing forms a significant part of a university's commercial services and, inherently, when universities take losses on their commercial services or don't make quite as much, that then has a negative impact on students. So, in an ideal world, there'd be space for students and for conference delegates, but that's clearly not always the case. So, I think, as long as, again, the mechanics behind this are clear, they're understood by all parties and the communication process for students is done properly and there's accountability, it's not a hill we're prepared to die on, really. It's part of the fabric of university, and, while it is a pain, it's not the end of the world.
Thank you. Actually, if the Chair will permit me, there's just one final question I wanted to ask the two of you. In an earlier evidence session, someone had suggested to us that some of the problems that the Bill is seeking to address are more of an emotive issue rather than an actual issue. Is there—? In terms of—. I think, though I hope I'm not misrepresenting, that was looking at the issues around whether more of a notice period would be beneficial for tenants. I think it was the general provisions of the Bill that that was being said about. Is there any particular evidence that you would like to point us to—well, I don't want to lead you in your response to that, but—in response to that suggestion?
I wonder if whoever suggested that has been forced out of their rented accommodation within two months and had to find that, whilst also balancing work, study and any other of the multiple, different factors that life throws at you. I would argue probably not, but that's for them to clarify. Look, this might not be happening to 99 per cent of tenants, but, the ones it does happen to, the impact is severe. The main—. Again, the core focus of housing policy should be to prevent homelessness, and, if we're throwing people a two-months notice period whilst they've got stuff going on—.
This is an opportunity to perhaps flag the student market as being quite different, and probably in need of some further exploration and to seek greater clarity. Students operate on these 12-month contracts. If you get part way through a 12-month contract and you're served a two-months eviction notice, trying to then find suitable student friendly accommodation for that period of time—most of it has even been let out for the next academic year. When you're then entering the regular housing stock, a lot of it is not friendly for pets, students or DSS. So, having to then try and navigate that, whilst fighting an eviction potentially within two months, and all the other stuff you've got going on, it's pretty intense. So, it might not be that it's happening to the majority of tenants, but one is one too many.
Thank you. Dan, is there anything you'd like to add to that?
Yes. So, I think just the threat of a no-fault eviction and the fact that it can come at any time, it can come out of the blue, you could have been diligently meeting everything you signed up for in your tenancy agreement, you can still get two months' notice to move out, it just creates a real sense of precarity among renters, and, when you don't have much trust in your landlord, whether that's—you don't necessarily know what they're like as a person, whether they're vindictive, whether they have your best interests at heart. It can create this real fear about raising concerns about disrepair or about anything that might need their attention. And so, just having the security that you're not going to just be asked to leave if you make a fuss about something is so important. I think the people we speak to, the renters we speak to, it's—just having the ability to have a trusting relationship with the landlord is so important, and the way the system's currently set up just doesn't engender any trust between landlords and tenants.