AMs are already well aware of the changing demographic profile of private renters and the fact that the sector is increasingly being seen as a long-term housing option for households who in the past would have been more likely to be able to access social housing or acquire a mortgage.
Households with children now make up a third of tenant households in the PRS. Today there are around 112,000 children living in privately rented housing in Wales.
Our 2015 YouGov survey of private renters, carried out in partnership with British Gas, found that 86 per cent of Welsh renters wanted to be able to stay in their home for as long as they need to. More than four in five (81 per cent) agreed that being able to stay in their home for as long as they needed would improve private renting for them.
But to date the market has not been able to provide the security that most renters need. This is due to an imbalance of supply and demand. Most landlords have no difficulty sourcing new tenants – the average void time in Wales is only 3.4 weeks. This means that there is little incentive to offer longer fixed terms in order to guarantee income into the future. As a result, landlords are able to prioritise the flexibility of easy access to ‘no fault’ eviction powers.
This is illustrated by the official advice of the National Landlords Association which appears on their website Q and A:
My tenant entered into a 6 month Assured Shorthold Tenancy, this is about to run out. Should I enter into a further 6 month agreement?
NO – in almost all cases it is better to allow the tenancy to become a Statutory Periodic Tenancy, this happens by default if you do not enter into a further agreement. The advantage is that you can, at any time serve a Section 21 Notice. This is a real advantage for a landlord, should a tenant become difficult.
Insecurity of tenure is closely linked to poor conditions. Our casework experience shows that tenants often move home to escape poor conditions because they know that if they try to take their landlord on, it is a battle they will ultimately lose due to their lack of security of tenure.
The Welsh Government has already acknowledged this by proposing to include protection from ‘retaliatory’ or ‘revenge’ eviction in the Renting Homes Bill. We welcome this move but we also know that the protection will not be failsafe – it depends entirely on how confident tenants are to exercise their rights in court. Improved security of tenure would mean that retaliatory eviction protection would no longer be necessary.
Because the market is not delivering on its own, we need to regulate in order to create secure, long-term tenancies. Doing so will encourage tenants to see a home as ‘theirs’ and care for it accordingly. It will give them greater confidence to stand up for their own rights, and work with their landlords to improve the state of their housing.
Can the sector cope with change?
The majority of landlords in Wales and Scotland say that their business would be unaffected by greater security of tenure. A YouGov survey of landlords carried out by our sister organisation Shelter in 2015 found that 56 per cent of Scottish and Welsh landlords said they would not change the location or number of homes they let out if longer term contracts became the default tenancy type, with a further 31 per cent undecided. Of those landlords who had an opinion on the question, four out of five (80 per cent) said their investment would be unchanged.
These stark findings undermine the often-cited opinion that most landlords would leave Wales if tenancies became more secure.
Figure 1: ‘It is possible that longer term rental contracts in Wales, and open-ended rental contracts in Scotland, may become the default tenancy type. Which ONE of the following BEST describes how you think this would affect your business as a landlord?’