Part of the debate – in the Senedd at 7:00 pm on 7 March 2018.
As well as growth in the private rented sector since the 1988 Act, the overall quality of properties has improved. Some have attributed this to removal of rent controls and the introduction of section 21, which gave landlords greater certainty over regaining possession. The growth in the private rented sector followed decades of decline. While the previous system of rent Act tenancies provided far greater security of tenure, the lack of landlord investment due to associated rent controls resulted in very poor housing. We have to make sure that in making changes to no-fault notice arrangements we avoid any unintended consequences. That's why I've asked my officials to open up discussions with the private rented sector on this issue and I'm pleased to say that following the meeting that we've had with Julie those discussions have already started.
So, yes, there are still bad landlords and not all tenants are perfect either, but we are taking positive steps. Rent Smart Wales, introduced under the Housing (Wales) Act 2014, requires that a landlord pass a fit-and-proper-person test prior to becoming licensed and to undertake mandatory training. This training has been very well received with 96 per cent of people trained saying that the felt the training would make them a better landlord. The Renting Homes (Wales) Act 2016 will make further improvements. It will help avoid disputes by ensuring clarity on rights and responsibilities, and it will also introduce significant new protections for tenants. For example, landlords will have to ensure that homes are fit for human habitation. Certain common law rights that are not currently immediately apparent to all tenants have been made statutory and will be included in all occupation contracts. This includes the right to occupy the dwelling without interference from the landlord.
While the renting homes Act provides for a no-fault notice that is similar to section 21, there are important differences. For example, under the renting homes Act, a no-fault notice is valid only for four months. This will stop the current practice whereby some landlords issue a section 21 notice at the start of the tenancy, so that after two months they're able to make a possession claim at any point in the future. The renting homes Act also provides protection against retaliatory eviction where a landlord responds to a request for a repair by issuing a no-fault possession notice. Under the 2016 Act, the court may refuse the possession claim if it is satisfied that the landlord was seeking to avoid the repair. Therefore, the implementation of the renting homes Act will provide additional protections. However, I do recognise that it still allows a landlord to obtain possession on giving two months' notice. So, the concerns that we have heard during this debate today will still be very relevant. In looking to address them, we need to consider the potential for those unintended consequences that I mentioned earlier arising.
For example, where section 21 notices can often lead to homelessness, it is important to note that roughly half of all homeless households are currently being rehoused in the private sector. Careful consideration would therefore need to be given to the potential impact of abolishing no-fault notices on the willingness of landlords to accommodate homeless households and the subsequent potential negative impact on the availability of accommodation. This is why those discussions with the landlords are so important. Also, according to the Residential Landlords Association, 52 per cent of section 21 notices are issued due to rent arrears and 12 per cent due to anti-social behaviour. If abolishing section 21 led to more claims being submitted specifically based on rent arrears or antisocial behaviour grounds, this could cause other problems such as greater difficulty finding a new home or not getting credit due to a county court judgment. Again, these are issues that I'd be keen to pursue further with Shelter and Crisis and others.
Beyond the potential impact on our ability to address homelessness, we will still need to be alert to the other wider potential impacts on the private rented sector, including on any willingness to invest and potential cross-border issues. These are all matters that I'm currently examining and why the discussions with the sector across the piece are so important. I'm also watching the developments in Scotland, where they've recently abolished no-fault notices, very closely. At our meeting last week, Julie, Dawn, Shelter and I agree to do some further work together to explore the issues and to widen the evidence base in order to establish what will be the best way forward. In the meantime, we can do and are doing much to mitigate the effects of section 21. The Early Doors service being piloted in Bridgend is a good example. The service enables landlords to contact a support provider if tenants fall into arrears and provides intensive support to tenants to help prevent eviction.
So, today's debate helpfully further raises the profile of the issues relating to no-fault evictions and it's a very useful contribution to provoke what I hope is a wider discussion on what can be achieved through mitigation and potentially through legislative change to ensure that our private rented sector is vibrant, of high quality, and fair to everyone involved.