Social Policy

How Rent Smart Wales can create a Welsh PRS that works for all

Whether they are to blame for holding too much of the country’s housing stock, further regulation in the quest for extra votes, or additional tax measures, landlords have long been an easy target for policymakers, writes Ben Beadle.

With the Welsh Parliamentary elections only weeks away, landlords have the chance to reform a government organisation that embodies all these principles by making their voice heard. The organisation I’m referring to is, of course, Rent Smart Wales (RSW), the central licensing authority run in collaboration with 22 Welsh Local Authorities.

After the passage of the Housing (Wales) Act 2014, the following year saw the creation of the nation’s “single licensing authority” for private landlords and letting agents. To legally let your property in the private rented sector, you must be registered with RSW. If you practice property management, you must pass a series of intensive training courses (and meet ‘fit and proper person’ requirements) to do so.

This, in itself, is not controversial. However, while it wields prosecutorial powers and regulates over 100,000 landlords, 5,000 agents, and 209,000 PRS households in Wales, RSW lacks a significant degree of accountability, transparency, and guidance. In turn, it means many local licensing schemes now subject some landlords to duplication of tests and fees.

The NRLA explored this issue in our recently released report Rent Smart Wales: The Accountability Gap. We decided to highlight this because, unbelievably, nobody else had addressed these concerns.  Although it has operated for five years and enforces legal standards, there had not been a Welsh Government-commissioned evaluation of the RSW’s approach. There is no public annual report nor direct scrutiny from the Senedd. There is no ministerial accountability because the “political leadership” for RSW has been outsourced to Cardiff Council, who administer RSW.

This is strange as it makes RSW far less accountable than a local licensing scheme. First, it means that  if all members in the Senedd and all councillors outside Cardiff were Conservative, so long as Labour lead Cardiff Council, they can use devolved Welsh parliamentary powers to operate this scheme.   Whereas a local licensing scheme must be decided by the council cabinet, consulted on, and voted through by the local authority, RSW can decide to change licence conditions at will. There is a stakeholder group, which includes the NRLA, that was consulted but there was no official response to the submissions, and it does not have a formal role. Second, there is a lack of clarity over what constitutes a political and operational decision, and whether decisions are made by officials or the councillor appointed by the Leader of Cardiff Council.

The same committee that recommended the creation of a body like RSW in 2011 also said the Welsh Government should publish a strategy for the PRS. Ten years on, this still hasn’t appeared.

Aside from creative general market uncertainty across the PRS, this lack of strategic direction inhibits the growth of a PRS which works in the interests of both landlords and tenants.

We believe this impacts the underperformance of RSW. In the absence of a central, guiding plan from the WelshGovernment, RSW have had to interpret what their mission to improve the PRS looks like. One consequence has been that licence conditions now make it tougher for landlords to run their business.Moreover the bulk of enforcement action focusses on bureaucratic compliance with RSW rather than tackling criminal landlords,  substandard housing, and the running of a seven figure surplus. 

To summarise the schemes’ requirements, they ask landlords of homes of multiple occupation (HMOs) to undergo another licensing process that duplicates requirements and costs far more than RSW does. Essentially, a second levy to let. So, despite fulfilling their national obligations, HMO landlords must also do the same on a local level. This additional licensing is in place in half of Wales’ 22 councils. We agree that HMOs need extra safety standards, and these should be reflected in rules that govern landlord activity such as in a licence.

One of our manifesto calls is to streamline licensing. We believe streamlining licensing without compromising on standards is a fair way to end this disjointed licensing system in Wales. Extra requirements for HMO landlords can be incorporated into forthcoming standards and the existing RSW infrastructure. This will also provide an opportunity for policymakers to investigate how to make RSW more accountable, work better for landlords and tenants, and end the practice of making “cash-cows” out of the former. 

The NRLA strives to make renting better for landlords and tenants, and as our proposals demonstrate, we advocate policies that we believe will make the rented sector work for all – landlords and renters alike. We appreciate the support of the Welsh Conservatives for our RSW report and concerns about the issues facing landlords during the pandemic.

The last year has been an extremely difficult period for landlords and tenants as both are left to incur debts as government help remains absent, with the inevitable consequences still looming. Once policymakers solve this problem, we believe the next priority should befixing the accountability gap in RSW and stopping the local licensing discrepancy in Wales. We can only begin to fix the housing crisis and improve the PRS when all sides realise landlords must be part of the solution. We believe our proposals achieve this and landlords should raise these proposals with their candidates across the country. 

Ben Beadle is the Chief Executive of the National Residential Landlords Association (NRLA).

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