The Welsh Government has initiated a consultation on ‘fair rents and adequate housing,’ during which Housing Minister Julie James revealed that rent controls are under consideration.

The consultation seeks insights from those engaged in the private rented sector on a plethora of subjects related to affordability, supply and demand, and the definition of ‘fair rent.’ However, the segment concerning rent controls may raise concerns among many landlords, who were under the impression that the Welsh government had dismissed the notion of rent controls following a debate in the Senedd in October 2022.

James, contradicting the previous stance, stated, “I am committed to using all the levers we have to ensure we maintain a viable private rented sector here in Wales, offering high quality and choice of accommodation, where landlords have confidence to invest in making improvements and tenants have greater certainty that longer term costs of moving into or staying in a rental property will be affordable.”

Four possible rent control mechanisms are up for discussion in the consultation. These include imposing a ceiling or freeze, limiting annual rent increases to predetermined percentages, and permitting rent increases only when a tenant vacates, and the property is newly advertised. Landlords in Wales could also encounter rent restrictions predicated on yield limits using a formula or a ‘costs plus’ model.

However, these proposals are subject to debate, and the National Residential Landlords Association (NRLA) is encouraging landlords in Wales to participate in the consultation, which follows a preceding Green Paper.

Ben Beadle, Chief Executive of the NRLA, voiced his concerns: “Let’s be clear, rent controls would serve only to decimate the sector further and would be a disaster for tenants, when so many are already struggling to find a place to rent. We all want to see more homes available to rent but adopting the tried and failed ideology of rent controls is not the way to do it. The best way is to introduce pro-growth measures to increase housing supply that will reduce costs for renters. Now is the time for landlords to get involved and for the Welsh Government listen carefully to the views of those providing much needed homes.”