Y Pwyllgor Cydraddoldeb, Llywodraeth Leol a Chymunedau
Equality, Local Government and Communities Committee04/03/2020
Aelodau'r Pwyllgor a oedd yn bresennol
Committee Members in Attendance
|Caroline Jones AM|
|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
|Dr Craig M. Gurney||Darlithydd ym maes Tai, Ysgol y Gwyddorau Cymdeithasol a Gwleidyddol—Astudiaethau Trefol, Prifysgol Glasgow|
|Lecturer in Housing, School of Social and Political Sciences—Urban Studies, University of Glasgow|
|Dr Tom Simcock||Cymrawd Ymchwil, Uned Gwerthuso a Dadansoddi Polisi, Prifysgol Edge Hill|
|Research Fellow, Unit for Evaluation and Policy Analysis, Edge Hill University|
Swyddogion y Senedd a oedd yn bresennol
Senedd Officials in Attendance
|Chloe Davies||Dirprwy Glerc|
|Katie Wyatt||Cynghorydd Cyfreithiol|
|Rhiannon Lewis||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.
Okay, 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. We have one substitution—David Melding will be substituting for Mark Isherwood for the Renting Homes (Wales) Act parts of our agenda today, and indeed throughout our consideration of that legislation. Mark Isherwood will join us for the items that do not involve the Renting Homes (Wales) Act. Are there any declarations of interest?
Yes. I'm a private landlord.
I refer Members to section 8 of my declaration of interests—a rental property, family property, in the Swansea valley.
Okay, thank you both for that.
Item 2 on our agenda today, then, is our second evidence session with regard to the Renting Homes (Amendment) (Wales) Bill. I'm very pleased to welcome Dr Craig Gurney, lecturer in housing at the school of social and political sciences, urban studies, at the University of Glasgow. Welcome, Craig. And also Dr Thomas Simcock, research fellow at the unit for evaluation and policy analysis at Edge Hill University. So, welcome to you both. Thanks for coming along to give evidence to committee today.
Perhaps I might begin with an initial question or two. Firstly, do you consider there is a need for this Bill, and, if so, why? Who would like to begin?
Okay, I'll start. Thanks for the opportunity to speak. I think one of the first things we need to ask is: what is housing policy for? What is the aim of housing policy? If it's about anything, I think it's about ensuring that we can offer opportunities for people to have stability and security at home, and I think this Bill does that.
I think there's now a wealth of evidence about the growing importance of the private rented sector. It's the most dynamic of the housing tenures. There's a lot of churn, a lot of people moving in and out. That's where everything's going on. If you want to understand the housing system, you understand what's happening in the private rented sector.
Reforms elsewhere in the UK—comparative research on the private rented sector elsewhere, recent work by Christine Whitehead and Peter Williams, for instance, comparative work in Europe, demonstrates the need for looking at how we regulate the private rented sector in new and different ways to reflect the fact that the sector is changing. The legislation we're currently working on was designed at a very different time, when the private rented sector was very different, with very different sorts of people in it, and very different sorts of landlords.
So, I think the Bill is important, because it's looking to balance the rights and experiences of tenants against the profitability in the sector for landlords. I think the Bill does that. There's important evidence that I know Thomas talked about in his submission, and I talk about in my submission—a really important evidence base that looks at the relationship between housing and security, housing precarity and health, particularly mental health. Many, many years ago I wrote my first academic paper about the notion of ontological insecurity, which is essentially—nowadays we'd talk about mental health issues that have been exacerbated by insecurity around tenure, and one of the things that this Bill talks about a lot I think, is security, but it also talks about peace of mind, and, for that reason, I think it's to be welcomed.
Okay, thanks for that, Craig. And Thomas?
Certainly. Thank you all for inviting me to give evidence today. In my opinion, there is definitely a strong case for this Bill to go forward. There is a growing evidence base of peer-reviewed scientific evidence from across the UK, but also globally, looking at private rented sectors in America and Australia, where they have similar regulations. This research highlights the negative impact that insecure private renting can have on mental health and well-being. But, at the same time, the sector in Wales has evolved. More people are being more dependent on private rented homes for a longer period of time. It isn't short-stay accommodation anymore. Families with young children are staying there for a long period of time, and the possibility of losing their home with just two months' notice when they're not at fault isn't simply fit-for-purpose in this evolving sector.
The Bill, with the provisions to increase the minimum security of tenure for renters, is going to improve the lives of renters, but it's also important to note that, if the tenant is in breach of their contract, landlords will still be able to get possession, and that will ensure landlord confidence in the market going forward. So, this Bill's rebalancing the power imbalance between landlords and tenants in that contract relationship.
Okay. Thank you for those opening comments. Of course, the legislation will amend the Renting Homes (Wales) Act 2016 before it's actually been commenced. Do you see any issues with that approach, or—? Are you understanding and supportive of it?
I think—. My view would be that it's better to get this right now than to look at it in the future, frankly. It's just as simple as that, I think. It's not been—. It's been—. The previous Bill has been passed, it's now an Act, I understand that, and we know it's not been enacted yet, is that the—? So, it's not been enacted—
Yes. Thank you. But this is a chance to ensure that tenants in Wales aren't treated certainly any worse than tenants elsewhere in the UK. So, yes, I think it's the right thing to do.
Okay. Would you add anything to that, Thomas, or—?
No, I'd agree with what Craig has said there.
Yes. Okay. Thomas, in your written evidence you refer to a growing body of research on the impacts of the insecure nature of the private rented sector in terms of health and well-being, and Craig set out some of the developments earlier in that regard. Could you say a little bit more—either of you, really—about the key conclusions of that growing body of evidence and the extent to which you think this legislation would address those matters, those issues?
Certainly. In the evidence base there are two key themes that emerge. Firstly, there's the impact on mental health and well-being. The body of research comes to the conclusion that private renters find it difficult to create a home in their private rented property, and they find it difficult to put down roots in their communities. Because they've got to move around, they aren't able to form friendships and feel as if they're part of that community. Landlords also then hold some considerable power over someone's home life in having that ability to evict with two months' notice. That speaks to wider issues around not being able to have a pet in the property, not being able to put up pictures so they can make it feel as if it's their home, and one recent case where the landlord had put the thermostat behind a glass box so the tenants couldn't control their heating. It was a house in multiple occupation, but it speaks to that power imbalance, and the other theme in the literature is that there is this issue with tenants not feeling as if they're able to then raise issues with landlords. If a tenant's got an issue with repairs, they've got that fear that a landlord could evict without notice in two months if there is an issue, or if the landlord doesn't like what they've said, or—. So, there is that power imbalance.
And then, with the local authority enforcement levels, which are pretty low across the whole of England and Wales, tenants aren't actually being protected from retaliatory evictions. Currently, you have to serve an enforcement notice on the landlord, which prevents a section 21 notice being given. Unfortunately, there were, I think, 5,000-odd enforcement notices served across England and Wales last year, so it's not suitable currently. So, I think this Bill, and the Renting Homes (Wales) Act, will improve that security of tenure, which will hopefully improve mental health, or at least contribute to an improvement. But also measures in the Renting Homes (Wales) Act will then hopefully stop retaliatory evictions as well.
Okay. Thomas, in terms of children and outcomes for children, you consider that improving security of tenure would improve outcomes for children. Could you say a little bit more about that in particular, and how it is—you know, what would be the long-term economic and social results of that?
Certainly. There is a very limited evidence base on private renting, but logically, the increased security of tenure, which means that children and their families would not have to move quite so regularly, would mean that families and children would be able to stay at home, and they'd be able, potentially, to stay in the same school, if they had to move, because the family would be able to find a suitable property. If there's less disruption in their school life, that could then include better scholarly performance, and then hopefully that would lead to better economic performance over the longer term.
I see. That's the essence of it, really. Yes, okay. Huw Irranca-Davies.
If I could pick up on that issue of the evidence base, first of all, in the evidence session we had last week with the Minister, she referred, at one point, to saying that some of the evidence, particularly in terms of no-fault evictions, is anecdotal. She didn't say it was irrelevant, but she said it was anecdotal. From what you've said, you'd clearly contest that—there is a strong body of evidence of the need for this Bill, and that, actually, it's not purely anecdotal, what we're hearing.
There's an unevenness, I think. Obviously, as academics, we're going to say that we need more research on this. But I think that there is certainly, as has been alluded to, a strong body of evidence that is making this connection between housing issues and health issues, which is there, and there is some comparative evidence—there are systematic reviews, recent work on housing precarity and insecurity in the tenure, so there is stuff there.
Yes. I think what the Minister was referring to were specific issues with the six-month notice period, because that's quite a unique notice period in private renting, on which there isn't really an evidence body around whether it would definitely work or it wouldn't. It's quite a unique way to go forward.
So, what do you make of her justification, which was that six months seems a reasonable period, and when you add it together it's actually a year, and so on? In some sense, it seems to us that perhaps it's a gut feeling about what's roughly the thing. Does it feel wrong to you? Does it feel right to you—the six months?
I think it does feel quite right, because it gives you that block in terms of, 'I know that I've definitely got a year there'. If it's around school time, a school year, it can be quite easy to think in that way, I suppose.
I agree. I think it's more than arbitrary. I think there is a sense in which this does feel right. It certainly feels right to me, and in terms of the discussion about offering tenants peace of mind, and feeling secure, this seems to offer the best opportunity for that, whilst still enabling a balance to be struck with the relationship with landlords. I think that's fair.
Okay, thank you. You've both been quite positive about the need to take this change forward, but can I just ask you: do you feel it's sufficient? When you compare it to what's already happened in Scotland and what is proposed for England, is this a great step forward, or are we missing an opportunity here?
I think it is a good step forward. There is potential, once we learn how the Scottish model is working, then there could be options for further reform, but until we really evaluate and understand what that impact has been on the Scottish model, it's difficult to know if that has actually improved security of tenure. Landlords can start eviction processes after day 1 of the tenancy in Scotland if they want to sell. So, has that actually improved security of tenure for tenants? Do they know that they're more secure?
But I'm interested whether you think—. Some of the evidence that you submitted suggests things like the Scottish Government restricting rent increases to once a year. I can't see, as a landlord myself, why would you do multiple increases in-year? What would be the purpose behind that? Local authorities being able to apply limits within certain areas, and you can see a sort of sense within that, and there are some other things here, but what you're saying is, 'Well, proceed with this and have a look at those going forward'.
Yes. In terms of Scotland, with the rent pressure zones, none have actually been implemented yet. It requires quite a significant paper trail for local authorities to actually implement it. I think it's consumer prices index plus 1 per cent, plus a percentage figure that the local authority identifies. So, that is still quite a significant rental increase to be introduced. So, it's working out whether that's actually working or not in the future.
The Scottish scheme—there's been some research commissioned, being undertaken by Indigo House, and they launched a website last month. So, they're at the early stages, they're designing the survey instrument to undertake that evaluation of what's happening in Scotland. I think we just need to wait to see in relation to what happens with Scotland. I think we need to wait and see.
I think David would like to come in at this point.
Yes. Just on this Scottish situation. I think Dr Simcock says that they now seem to have a more connected-up system. Is that in policy coherence or is their law, now, more consolidated as well?
I don't know if I'd be able to answer that sufficiently. But in terms of that policy, there are other reforms, as well, that that's brought in. So, it's reformed the tribunal service as well, which is a key concern, especially in England with the number of court cases, potentially, to be brought in.
I haven't got anything to add on that.
You mention, Dr Gurney, in your written evidence, your concerns about the lack of tenant and contract holder voices within the consultation. Could you expand on that a little bit?
Yes. I mean, I wasn't, by any means, intending to be critical of the consultation process. I think it was just a point about the policy process, and I would note that landlord organisations have been very good at organising, very good at lobbying and, clearly, those residential landlord groups are sectional interest groups, and within the policy process, they're very powerful actors. And I just would hope that, in these evidence sessions, the voice of the tenants, who, at the end of the day, should be at the heart of this, aren't drowned out by well-organised economically and politically powerful landlord organisations. That's the point that was being made there.
Okay, thank you. To turn to that, one of the criticisms that you both made in your written evidence is of the survey that's come forward from the Residential Landlords Association. You're both academics, so you can explain to us your concerns around potential sampling bias and other matters.
Yes. I would imagine that some of my former research students are watching this, and I've taught research methods to housing students for very many years.
Core module research methodology.
Absolutely. Yes. I've got concerns with that, I must say. I've got concerns. This particular piece of evidence has been picked up on here, it's been picked up on in the House of Commons library briefing and the reformed section 21, but I've got serious reservations about the transparency, the reliability and the validity of that research. There's nothing, really, in terms of—there's no robust methodological statement, it's not gone through the same peer review as other papers that have been cited have, so it's not an academic paper, in that sense.
The sample size at 6,365, they claim, is large, and, certainly, it is large, but I would urge the committee not to be swayed by that sample size, because it's not really clear who has responded and who hasn't. It's not clear whether there's been the opportunity for people to make multiple responses. And because this survey is conflated with consultation, because, in some instances, this data is referred to as data that's come from a survey—in other words, since it's a consultation, those are different things—and because the link has gone out to members of an organisation where people have got a particular vested interest, I just think we've got to be very careful. I'm not at all suggesting that the research has been manufactured—I'm not suggesting that—but I think that it's of a different order to some of the peer-reviewed systematic evidence reviews that you considered in the explanatory memorandum. I just want to make that quite clear: for me, it's of a very different order.
Dr Simcock, you might want to add something, because in your written evidence, you've mentioned that it doesn't look at the total number of tenancies ended by no-fault evictions or the underlying reasons.
Yes. It asks for multiple responses in terms of, 'Have you served a section 21 notice? What were the reasons for this?', and landlords are able to tick multiple responses. So that doesn't actually say, 'Well, actually, that landlord ended five tenancies for rent arrears and one for anti-social behaviour.' It doesn't give us that clear understanding, whereas in the evidence I point to, there are reports from Dr Chris O'Leary from Manchester Metropolitan University that did actually provide that breakdown.
Is there any evidence beyond the Manchester Metropolitan study, or is this going to be an area that you both say we need more study of?
There is very limited evidence on that and, yes I would suggest we do need more research on it.
The research funders will have noted this.
You can appreciate our caution. I'm afraid we do need more research in this area. We've both made comments independently that there are gaps.
Okay, Huw? Caroline.
Diolch, Gadeirydd. Good morning. Dr Simcock, your written evidence suggests that the Bill is a welcome first step in modernising the private rented sector, so do you think further steps should include moving to completely abolish no-fault evictions in the long term, or are there other measures that you think should be prioritised?
I do think, in the long term, possibly a move towards abolishing no-fault evictions, but then it's also how you balance that out against other grounds for possession. It's then going back to the Scottish model and then, whatever is planned for England, once we find that out, and how that's working. I think, in the very long term, that's probably the way to go to look at that, but I think in the near future the main focus should be, once this Bill's put forward, improving the control that tenants have over their home life. So, being able to have pets, working to make that possible; being able to put photos in their properties so that they can make it more home-like; making sure that they have access to their own thermostats. I think that's quite an important next step after this.
Yes. You were saying about the private rented sector with pets, and I think it's very important that people should be allowed to have a pet, obviously, but the housing associations are moving now to written policies, of no pets—no dogs, anyway. So I think it's fair to say that there's a compromise that's needed between both sectors, really, in that area.
Is there any evidence or research that suggests that landlords will be leaving the private sector as a result of the amendments to the Bill? Does this Bill, in any way, do you think, reduce the supply of private rented accommodation? In Scotland, the evidence in 2018, as a result of a Bill, resulted in 24 per cent of private landlords leaving the sector and only 5 per cent incoming. So that's a reduction, really, of almost 20 per cent. So I wonder if you can throw some positive light on that for Wales, please.
Certainly. There is limited evidence on how many landlords are selling up, how many landlords aren't selling up. There is an age and time element to this, as landlords generally are over 60. Most landlords have invested for a pension pot over the last 20 years, so there is this time when they're going to be trying to withdraw their pension and so there will be a natural selling off by landlords anyway. So there might be an opportunity for landlords thinking, 'Okay, there's all this stuff coming through, there are the tax changes as well.'—which has been the most important thing for them, really, in terms of whether they'll sell or buy in terms of that.
Unfortunately, after every major legislative change that's happened across England and Wales over the past few years, landlords have said that they are selling up or are going to sell up. My research shows that there's actually this disconnect between landlords who are saying they're selling up in one year and then, one year later, saying, 'Well, actually, we have sold properties', or not. I think it's a median difference of seven percentage points from the percentage saying they're selling. So, the actual extent to which they might be selling might be overstated.
When you talk about landlords of a certain age, over 60, do you not think that the trend with people living longer and going into the future—well, 60 is the new 50; we hope, anyway. So, do you think that that has an impact as well, would you not think?
It might have an impact. I couldn't really provide any further clarity on that, unfortunately.
Okay. Thank you. Reforms—
Caroline, I think Craig just wants to come in on that.
Sorry, I do apologise.
No, that's fine. It's just I think it's important to make the distinction between landlords and stock. Are we talking about landlords exiting here, or are we talking about a diminution of the stock? Clearly, some of the landlords have just got one or two properties, what happens to their properties? I think the market mechanism is so strong here that the market will step in. I think the expression is 'Crying wolf', and I think there is a danger, actually, that—. Certainly, with Rent Smart Wales, I followed the progress of that very, very closely, and I think there wasn't the exit of landlords from the sector that we might have expected.
In relation to an increasing ageing population, of course, we've got to think about ageing tenants as well as ageing landlords. We've got a situation now where we've got a pensioners time bomb, where people aren't able to use their dwellings in an occupation as an asset to support their pension. We've got older renters. Up until a few years ago, a lot of the discussion was about generation rent and thinking about younger renters, but there's increasing evidence from people like Kim McKee, a colleague in Scotland, talking about older renters, and I think we shouldn't forget that. Again, it's this balance between the interests of landlords and tenants.
Thank you very much. So, reforms in England may mean that Wales is the only nation in Great Britain to retain no-fault evictions to some extent. So, what impact do you think this will have on private landlords' investment decisions? You know, those thinking of entering. Do you think there will be an impact?
It's hard to know until we know what's actually going to happen in England. England may get rid of section 21, but they might have very lax section 8 routes. We don't truly know what's going to happen, but it might mean that landlords could decide to invest in Wales more than in England. In reality, I think landlords will look at the finances of the property first, and then maybe the regulations second. So, if the numbers stack up for them, that might not deter them, or it might deter them if the numbers don't stack up.
We simply don't know; that's the issue. These markets are the summation of individual investors' decisions, aren't they? We don't know. Hypothetically, there might be some border-related issues in the same way, when your colleagues scrutinised the minimum alcohol pricing, there was a big discussion, wasn't there, about border communities? So, there might be some very, very small-scale shocks on border communities, with perhaps landlords disinvesting out of some areas and putting money into others because it's seen to be preferential. We simply don't know. But I think if that was the case, it would be, at best, marginal. I don't think this is too much of an issue, frankly.
Thank you. Diolch, Cadeirydd.
Okay, Caroline. Dawn.
Thank you, Chair. Morning, both. One of the things that you said in your submission, Dr Simcock, was that you were concerned—maybe concerned is perhaps too strong a word—but you raised the potential unintended consequence of landlords perhaps moving into the short-term letting market rather than continuing the long-term let. What was your thinking behind that?
Well, unfortunately, short-term let offers significant financial reward for private landlords if they have the right property in the right location—that is important to that. And it's less regulated than the longer-term market. It does, however, require a lot of work, unless they use an agency, to then, you know, change the bed linens, and all the other furnishings as well. So, there is a minor cost element for starting it up as well. My concern was that some properties could move over to that if landlords decide that they want a more unregulated market, and because it does offer that significant financial value.
However, on balance, if landlords are already looking at the numbers anyway, they've probably already moved over to that market, especially in Cardiff or other seaside areas, tourist areas. So, on balance, I don't think this Bill would have too much impact in swaying loads of landlords to move into that market. And then you've got the issue of market saturation as well. If loads of landlords are trying to move into that market, the price that they actually get in the long term might drop quite significantly.
But you think, location wise, it might be limited to specific locations where that might happen.
Yes, that's what the evidence suggests globally as well, in terms of the impact of Airbnb. In terms of London, it's very centred in inner-London constituencies and locations. It's very hyper localised, where you've got apartment blocks turning into de-facto hotels.
Edinburgh is another case study. Famously, there's a massive issue there in terms of people being priced out because of the saturation of Airbnbs. More globally, places like Santorini and places like that are just inundated.
Sorry to interrupt, I was just thinking, it wouldn't be difficult to get the hard data on the geographic basis within Wales of the balance currently between short-term lets and longer-term tenancies, would it, and then to actually monitor this and the impact of this to see whether it is marginal or not? I imagine that data exists very soundly, because landlords now have to register.
Yes, they've got to register with Rent Smart Wales, so we would know where Wales's private-rented properties, if they're registered, are. There are sources out there that can track, to a degree, the location of short-term letting properties. I know there's a lot of London councils that are using services to try and track them down.
Thank you, Chair. I just wondered whether you thought that the impact of the Bill on the courts system and process is clear enough in the explanatory memorandum that goes along with the Bill.
It's a difficult one. Again, I sound like a broken record, but we simply don't know. I think I would reiterate my note of caution that I was concerned that much of the regulatory impact assessment was based upon the data from the study that I've already—. I think we should take—. We should be cautious about it. Tom, haven't you got some Ministry of Justice data?
Yes. In terms of the current route, section 21 actually takes longer through the courts currently than the section 8 route. So, section 21 is 27.4 weeks—that's across Great Britain, the MOJ don't provide a breakdown for England and Wales for that—but the section 8 route takes 22.9 weeks on average, the mean time. So, already, it's actually quicker to go through a fault-based eviction through the courts than through section 21 at the moment. Given the research from Chris O'Leary at Manchester Metropolitan University—he's got the breakdown, if we use that, that 54 per cent of section 21s were fault based—it would actually potentially be a lot lower impact on the courts than what's put in the regulatory impact assessment.
Okay. So, the chances of landlords then switching to using section 8 rather than section 21 is probably no greater, because at the moment there are probably more of them using section 8 than 21 because of the timescale. Although, they've got to have very specific reasons, haven't they, under section 8? That's the difference, I guess.
And it's more expensive, you need legal representation—
Under section 8, yes.
—to use section 8. There's a huge difference, isn't there, between them?
I think one of the things that this Bill does is highlights the importance of seeking possession for breach of contract. Actually, let's call it what it is. If landlords want to end a tenancy because there's been a breech of contract, they should use the appropriate mechanism. I'm not saying that other people outwith this building can sort that out, but in the sense that we can only scrutinise what we've got in front of us, I think that it seems entirely appropriate to me to use the right piece of legislation to get the outcome people want.
And what this legislation isn't doing is—it's not saying that people can never be evicted.
There are very clear areas where they still can be. Okay. Now, I just want to ask you a question about the effect of the Bill on homelessness. We've received a submission from Shelter Cymru and they expressed concern that households receiving a six-month notice on a no-fault eviction would not be seen by local authorities as being threatened by homelessness, because under the Housing Act (Wales) 2014 the local authority has a 56-day duty to try to deal with homelessness. So, they're a bit concerned that extending this period is going to impact on that. Is that something that is of concern to you, or do you think there is a way in which, if we strengthen the guidance to local authorities, that could deal with that issue?
I think if we strengthen the guidance first, find out how many local authorities are responding, and then, in the future, if local authorities aren't doing their duty to provide support to those who really need it, potentially, then further amendments would be required. But you'd hope that local authorities are stepping up and providing that support to those who are the most in need in terms of housing support.
It's the 56 days, I suppose, that's the concern, because that almost correlates with the two months, doesn't it?
Yes. That's where it started. It's a tricky one, but I think this committee should be guided by the evidence provided by people who are offering homelessness services. My view would be that we deal with this with more robust guidance. I don't think we need to be doing additional tinkering to the Bill.
Okay, Dawn. Thanks very much. And Delyth.
Diolch, Cadeirydd. Morning. When Huw Irranca-Davies was asking you about what evidence there might be, if any, for increasing the minimum notice period to six months, from what you said there I got the impression that there isn't firm evidence. You seem to be agreeing with what the Minister said, which was that it seemed to be right. I was interested that you made the point that, actually, giving security for a year of tenancy fits with the school year, and that's certainly a compelling point. So, would there be any evidence to support this? Because you said that it's a unique set up in this case. Is it mainly then the psychological security that a year gives? Or, aside from that fitting in with the school year, is there any other evidence like that to back up why this is the right period of time to go for as a minimum notice, would you say?
I can't think of anything that specifically answers that question. That's not to say there's not—in some obscure academic journal, hidden away somewhere—a paper that says that. I'm of the opinion that, as the Minister said, it feels right. I would go no further than that, at this stage.
I agree with Craig on that one.
Okay, thank you. Looking at the minimum notice that a landlord would need to give, do you think that it's appropriate that it's a six-month restriction that's on landlords serving notice at the start of a standard periodic contract? Is that the right amount of time, again? And is there specific evidence that would support that?
Again, we're dealing with unknowns, aren't we?
I know—but they're two separate questions. [Laughter.]
It's similar; it's a very important question. But I think that that chimes with the direction of travel of the legislation we've got in Wales and where we're going with this. I think to not have that would undermine the good and the impact upon people's health and well-being that this legislation could make. I think that to not have that would be a big mistake. Beyond that very bold statement, I want to say no more than that, really.
Okay. And on that, because you've been asked earlier about whether we should move in the future towards abolishing no-fault evictions altogether, is it that the six-month notice period at the moment seems right because it's certainly better than two months? Or do you think—I'm aware that I'm straying into asking you to very much think hypothetically here, and that you're not able to draw on an evidence base. But do you think that it's a case of the longer that a tenant has security the better? Or is it very much in keeping with, actually, there's something about the psychological security of fixed periods of times, like six months and a year? I suppose that's what I'm trying to get at.
That would make a fantastic research question—seriously—in terms of the psychology of periods of time. Because we think in terms of these socially constructed notions of months and weeks. My view is that you're probably right, there is some notion about six months or a year being something that we can kind of visualise. But, I think, most importantly, it's just the length of time. Six months is better than two months. I think that it's as simple as that.
And you would agree.
I would agree with that, yes.
Okay, thank you. So, looking at the devil's advocate side of the issue of how long a landlord would need to wait before serving notice: is there any evidence that you know of suggesting that this would make landlords less likely to let their properties to more vulnerable tenants, who might be seen as higher risk?
I think that speaks more widely to the welfare reforms that have occurred. We've got universal credit, we've got the freeze to local housing allowance. That is causing rent arrears across, not just in Wales, but England as well, which then does cause landlords to consider whether they want to let in that sort of market. There's the whole 'no DSS' campaign that's being run by Shelter at the moment. There's the out-of-court settlement that the letting agents have settled for because of that. So, it does mark that landlords may go down that route.
But, if the tenant is in breach of their contract, there are two routes that landlords can actually go forward with. Section 181 is a two-week notice period if they are in serious rent arrears, which is a lot shorter than a two-month notice period anyway under section 21. Section 157 is a one-month notice period for breach of contract, which is still shorter than that two-month notice period. The key thing is, though, that they would have to go to court and provide evidence that the tenant is in breach of their contract. In balance, though, if the tenant is being accused that they are in breach of their contract, should they not have their right to defend against the accusation that they are in breach of their contract, especially with anti-social behaviour? Is it the landlord saying that they are making anti-social behaviour, or is it actual anti-social behaviour?
And, looking at—. Just quickly, going back to actually all of the minimum notice periods that are being introduced by this Bill, would you like to see—? No, I won't ask that. Do you think that housing policy in other parts of the UK might well follow suit? Obviously, they would need to see the evidence base that, as yet, doesn't exist, and this will provide the evidence base. But, do you think that—? Again, you said that what this is setting up is unique. Do you think that there's a compelling case to think that this will be setting a new standard in the UK?
I could be persuaded by that argument. I think that, again, it's the balance. It's the balance about: do you seek possession by going through all of the different routes that you could take, or do you fall back on section 21? Yes, I would imagine that there will be envious glances from across the different borders, but also a curiosity to see how it works. I think that one of the fascinating things about devolved housing policy in the UK is that it's very, very different up the road. So, I'm kind of saying that we don't know again.
No, of course. We will have to wait and see about that. Looking at break clauses, do you think that the restriction that's brought in on the use of break clauses, that they can't be used in contracts of less than 24 months—? Are contract holders or tenants generally looking for longer fixed-term contracts, and do you think that the Bill does anything to encourage landlords to offer longer fixed-term contracts?
I think that there's a key difference between a longer contract and longer security of tenure. Having the ability to stay in your home for longer is different to being stuck in an inflexible contract for a longer period of time. So, the private rented sector does offer flexibility in terms of economic mobility. So, if someone finds a job and they want to move to a different part of Wales, being a private renter means that it's probably quite easy to move, rather than owning or having to go through that whole process. But if you are stuck in a two-year contract or a three-year contract, that actually could cause problems if the landlord doesn't want to end the contract or mutually agree to that. Then, in terms of the break clause, if it's at 18 months, if landlords think, 'Okay, I can't have a break clause until 18 months, I'm not going to let the tenant have that break clause until 18 months', that could then unfortunately trap that tenant in there maybe for a longer period of time than what might be needed.
I think, just very briefly to add to that, Tom is entirely right, let's remind ourselves again that this is a very, very diverse tenure and there are lots of different sorts of tenants who might want longer contracts, but I think we've got to be very careful not to paint a broad brush here. It's a very, very diverse tenure full of very, very different households. And I think that, going back to this point about offering stability and security, why is owner occupation so popular? Yes, there are all the arguments about passing on money to your children and things like that, but the property of owning that makes it so popular is the stability and security that it offers, and if we can do something in Wales that makes renting more stable and more secure, that's a good thing.
On that point, forgive me, it's not actually directly related to these questions, but it's related to what you've just said—and forgive me if I'm straying into what someone else is going to ask, I don't think I am. The Minister has suggested that the Government might be interested in looking at whether any interventions can be made in the market, so that there will be more of a market for selling a property with the tenant, and I've had different responses from different people about whether or not that would be feasible in the market. Again, is this something that you think could be feasible or are there many barriers that would be in the way that would be insurmountable?
That would be additional legislation, because there's nothing to stop this happening now. I was a tenant in a property in north Cardiff a number of years ago and it was put on the market. It's not unusual for tenants to find that you've got a new landlord because it's been sold. There's no reason why that shouldn't happen. But I suspect that real estate agents have got a vested interest in encouraging landlords to ensure that properties are empty to make them more saleable, because of the risks. Yes, of course, hypothetically, we could do things to support the sale of properties with tenants in situ, but I think, again, we're double guessing how markets work. That's the unknown here. My view is that we kind of wait to see on that one.
And there's absolutely already platforms available where landlords can sell properties with tenants already. I think there's one called Vesta, a property platform where landlords can advertise their properties to other landlords where there are sitting tenants. So, there is a market there already for that process to happen and the platforms to do it. I think it's a case of creating that idea for estate agents and landlords that, actually, it isn't going to cost you more, you're not going to make less on a property because it's got a sitting tenant. It can be quite a valuable investment for the landlords as well.
It's guaranteed. That's the yield. It comes from the tenant paying you rent.
Thank you, diolch.
Okay, Delyth. David.
Thanks, Chair. If we look at the no-fault notices, this Bill would ensure that a new no-fault or re-issue of the old one would not be permissible for six months after the expiry of the original one, and the Minister says this is to stop a rolling no-fault six-months' notice being given. Is there any evidence that landlords engage in that rather cumbersome process?
Most of this actually comes from Citizen's Advice, Shelter, Crisis, who have a lot of casework, and MPs as well, as Westminster also put an expiry notice on section 21 notices with the Deregulation Act 2015, so that a section 21 notice would expire in England after the six months. So, this would actually bring it in line with the current English situation as well.
But is there evidence that landlords do this rolling—
It's more anecdotal from poor practice that happens out there. Well, past poor practice, as they're unable to do it in England now.
The one check on that is that you can re-issue the notice within 14 days in case there's a technical error in it. Is 14 days a reasonable period? Or should it be at the discretion of the court? Because after three months, if it's suddenly discovered there's a technicality, it doesn't have a material effect, but would, at the minute, null and void the notice. That seems disproportionate if a landlord is taking reasonable action.
This is a legal document, and I think people need to be mindful of what they're doing when they're signing legal documents, and to make sure they're not making mistakes. I think that was the argument that we've got these 14 days in which to make changes. That's all I have to say about that, I think.
I think, in addition to that, if the courts are then able to make decisions at discretion, then that's then adding into case law on discretionary grounds and possible loopholes, if then landlords decide to make that error deliberately, so that they can then re-serve it at a later date if they know the property's going to be sold, not within that six months, but maybe nine months. So, in three months' time, they have to go to court saying, 'We need an extension on this.' Does that then open up loopholes in that situation?
As Craig said, it is a legal document. You would expect professional landlords to take due care in that situation. An eviction notice to attend is quite a scary thing—they are losing their home. So, I think it's about having that balance between landlords getting things right, but also then having that balance for tenants—knowing that things are being done properly, and that they can't be subjected to continuous section 21 notices or section 173s.
One of the biggest markets is the student rental market, and that's typically on a 12-month contract, with some restricted access sometimes. Does this legislation strengthen or weaken that market, as some landlords could be reluctant to issue 12-month contracts, which could be pushed to 18 months, in effect, if the students wanted to stay, I suppose?
I suppose, from my experience as a student in the private rented sector, at the end of my tenancy, we left. We didn't want to stay around—people either go home because they've found a new job, or they move somewhere else for a job, or move for further education somewhere else. So, I think it's striking that balance as well. I don't know many students who would actually probably stay afterwards, but then it is their home as well. Just because they're a student doesn’t probably give them any less right to have that security of tenure in their home, if they're not doing anything wrong. I would assume that students would want to stay past that 12 months if they've got other opportunities, but then they might want to stay in the area, so why should they not be able to contribute to that community as well?
You know, I think your conjecture is reasonable, but it's conjecture, isn't it? Shouldn't we be drafting law on something a bit more robust and rigorous?
What we're talking about a lot today is the operation of the market mechanism, and there are all sorts of things we could say about that, but perhaps not for now. So, a lot of things—. We haven't got the evidence that necessarily supports going one way or the other. I think we can make assumptions based upon how we understand that housing markets work, and the way in which housing market failure works. And I think given all that, in the balance, in the round, in relation to student lets, it's negligible at best. Honestly, thinking about this, and Tom's point about what—. There might be issues here that cut across people's status as a student. This might be an issue for, say, mature students, so there are issues there about non-traditional students, but that of course brings us on to a discussion about precarity and inequality. That's not about whether someone's a student or not—that's a whole different ball game. But I think, given what we know about student rental markets, I really don’t think this is going to upset any apple carts.
Then my final question. Dr Gurney said in an earlier answer at the start of this session that the voice of the landlord is typically very strong and the tenant much weaker. How do you think the tenant engagement and consultation has been in this particular legislation?
I think I mentioned earlier on that I wasn't seeking to be critical of the way in which you've gone about consultation before, but I think in research method terms, tenants are a hidden group. They're not as well organised in the private rented sector. They're not as well organised as landlords are. It's more difficult to locate them in terms of doing a national survey of Wales—you have to simply ask for them to tick the box, 'I'm a renter' or—. So, that poses a methodological problem about how you find them and I know there are a number—I know Tom will have something to say about this—of tenant organisations that are becoming more active through social media, but they're difficult to find. They're less organised than landlord groups.
And Dr Simcock, you've mentioned several things that you think are at least as pressing for tenants, like the right to have pets, which speaks to a whole contractual process that's quite prescriptive, whereas shouldn't it be the reverse? As long as you act reasonably, you can do reasonable things in your home. I have no idea whether model contracts are shifting in that direction, but I suspect it's slightly ambiguous. So, are we losing something in terms of what we could have done in this legislation and making it more complete?
I think this is a good first step. I mean, there are areas, in terms of having pets, that would be—. A blanket ban, under the unfair consumer law, would be an unfair term. But I think it's about the guidance provided to the landlords about the fact that, actually, you can't have a blanket ban on pets. It is taking it in terms of the best merits of the situation. One of the things that does get brought up is, 'Pets cause a lot of damage', but there are landlord insurance products out there that do cover it. They also cover loss of rent as well, so if tenants are in rent arrears, there are insurance products that cover that. And there are tenant content insurance products that cover pet damage as well, and I have looked into that myself. So, there are products out there that can minimise that risk as well for that situation. So, I think it's—. Rather than legislating for that situation, I think it is more about the guidance that's provided, and better information for landlords and tenants to encourage that going forward.
Okay, thanks David. Huw.
[Inaudible.]—if I may, because it's slightly outwith where we are. David has mentioned about students, and, actually, if you're a student from a disadvantaged background in the private rented market—we often see students for the first year in halls, then they go out into the private rented market. Do you have an informed view, perhaps informed by any evidence, on the divergent practice of private landlords in the student rented market, who often offer 12-month tenancies where the students are asked to leave for the duration of the summer? Now, if you're in academic halls of residence, that may be perfectly understandable and the student will pay up until June/July, and then it's rented out for other things. But for a private rented landlord to offer 12-months, and say, 'Well, you can either pay half through the summer in order to secure your tenancy for the following year—this power relationship—or alternatively, you pay full whack, but you've got to get out by July and you're not allowed to come back in.' Do you have an informed view on that, because it might be something the committee might want to look at in future?
From my own experience, I did have that situation where I wasn't allowed in the property, but, thankfully, my landlord didn't ask for any money for it, so we only had a—. We were allowed to keep all our stuff there and everything for the next year, but we weren't asked for any money. That would be, I'd say, unscrupulous landlord behaviour in terms of that practice. It does go towards that power imbalance—people wanting to stay in the same home, because they know the area, there are students there—. It's sort of exploitive in a sense.
Sorry, it's outwith this Bill, but—.
You've asked a question—my informed view, to answer your question, would be that I'd want to see a more convincing evidence base and, I think, we simply don't know. There's a lot of things here that we don't know the answers to, which for somebody who teaches and researches housing is fascinating, because we still don't know the answers. But it's annoying because we need to undertake the research to get the data to help you. So, I've dodged that one, but I think my informed view is that I would want better evidence.
Okay, Huw? Right, okay. Well, thanks, Craig, and thanks, Thomas, for coming in to give evidence to the committee today. You will be sent a transcript to check for factual accuracy. Diolch yn fawr.
Thank you very much indeed.
The next item on our agenda today, then, item 3, is papers to note. Paper 3 is additional information provided by the Minister for Housing and Local Government on the Local Government and Elections (Wales) Bill, which we will be discussing later. Paper 4 is the Welsh Government's response to the committee's report on the draft budget for 2020-1. And paper 5 is additional information provided by the Deputy Minister and Chief Whip, following the evidence session for the committee's post-legislative inquiry into the Violence against Women, Domestic Abuse and Sexual Violence (Wales) Act 2015. Are Members content to note those papers? Okay, thank you very much.
bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).
that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).
Cynigiwyd y cynnig.
Item 4, then, is a motion under Standing Order 17.42 to exclude the public for the remainder of today's meeting. Is committee content so to do? Okay, we will move into private session. Thank you very much.
Derbyniwyd y cynnig.
Daeth rhan gyhoeddus y cyfarfod i ben am 10:31.
The public part of the meeting ended at 10:31.