We now move to the short debate. If Members are leaving the Chamber, can you do so quickly and quietly, please? We now move to the short debate and I call on Jenny Rathbone to speak on the topic she has chosen. Jenny.

Thank you very much, Deputy Presiding Officer. My debate is about the very important issue of rented housing and why we need rent controls. I've agreed to give a minute of my time to David Melding and nobody else has indicated that they want to speak.

Good, affordable housing is the cornerstone of a decent society. Housing is too important to the population's health and well-being to be left to market forces alone. We cannot allow a rampant free market to condemn generation rent to expensive, insecure low-quality housing. Housing is being used as an advancement opportunity, rather than a place for people to live, and this is fuelled by politicians who keep on talking about getting on the housing ladder, as if it is a nirvana we all need to aim for. I've got no problem with people wanting to own their own homes, but it is not, in itself, an essential requirement for happiness and success. It's our job, as legislators, to deliver prosperity for all and to protect those who are less able to protect themselves, and we urgently need firm action to change the dysfunctional housing market, which is condemning generation rent to permanent insecurity and instability, and distorting our economy.

Social housing is insufficient to meet demand and new tenancies are now mainly confined to people with protected characteristics. But the first rung on this hypothetical housing ladder is beyond the reach of the majority of my constituents. I accept that the picture in Cardiff is not the same as across the wholes of Wales, where, happily, a mere 15 per cent are in private rented accommodation, but in my demographically young constituency, it is in danger of becoming the dominant position, with all the insecurity and instability that that involves. While local authorities do their bit to close down properties that are not fit for human habitation, there's an almost complete lack of consumer protection for private renters.

Complaining about disrepair often leads to eviction and many tenants instead put up with appalling conditions. That doesn't mean that there are not good landlords who maintain their properties promptly and effectively, but the tenant has no right to remain and no reason needs to be given for ending a tenancy. It's that instability of renting that is so damaging for well-being. No roots can be put down, no certainty about schools or jobs that a family can count on. Each tenancy ending means finding at least a month's deposit, more agency fees, unpredictable rent increases and moving costs. It doesn't need to be like this.

Before 1989, private rented sector rents were determined by the Valuation Office Agency, and the VOA set a fair level of rent for the property and calculated by how much that amount could increase. This provided certainty for both tenants and landlords, but the Housing Act 1988, at a stroke, moved Britain from one of the most forcefully regulated of private renting in the world to the most de-regulated, uncontrolled system in the developed world. Since 1989, landlords in Britain have been allowed to charge tenants what they think the market will bear. Unfortunately, the only de facto rent control that has been introduced is a cap on housing benefits, which has just given rocket boosters to the already unacceptable levels of instability.

The Department for Work and Pensions estimates that nearly 50,000 households in Wales will be affected by the cap on housing benefits. Paying 30 per cent of local market rents instead of the previous 50 per cent shrinks the options of the poor and also takes into account the size of the property. So people who are forced to downsize as a result of the bedroom tax don't just see the space of their home shrinking, they also see their options shrinking very substantially. They don't even have the option of squeezing into a tiny home to stay near their child's school or their elderly parent, because they'll also be caught by a further cap on different sized properties. So, the smaller the property, the less housing benefit will be paid.

The House of Commons Welsh Affairs Committee inquiry into the impact of changes in housing benefit in 2013 warned that efforts to control housing benefit increases quite rightly have to include strategies to manage spiralling rents in the private rented sector, including direct rent controls. I agree, and nearly five years later we need urgent action now. Rents in Cardiff have already outstripped housing benefit caps. For example, a two-bedroomed flat in Admiral House on Newport Road costs £1,200 for two beds, or £950 for one with a single bedroom. This isn't leafy Cyncoed. This is an area challenged by dangerously high levels of air pollution. Indeed, even many housing association rents now exceed housing benefit caps.

The lack of rent controls has become a form of social cleansing. People who are poor cannot find anywhere to afford in Cardiff and they either become homeless or they're forced to move away, splitting up families and denying people the support networks that make for cohesive communities. This is a recipe for adverse childhood experiences and mental illness. We need rent controls. We need an end to unfair evictions and a radical overhaul of the housing system to deliver rent stability.

The power to regulate rents in the private sector was transferred to the Welsh Government by the UK Parliament in 2006, and the Renting Homes (Wales) Act 2016 introduced a new legal framework for renting a home in Wales. Landlords now have to undergo a minimum training into their rights and responsibilities in order to get registered. The forthcoming Bill to abolish letting agency fees, while important, is not going to be sufficient to deliver a fair deal for tenants. Agencies will unfortunately seek to add the costs onto monthly rents, which are already unaffordable.

Fair rents offer a sustainable means of preventing rents spiralling further out of reach to so many of our urban communities. Indeed, even the Welsh Government's annual report on private sector rents recognises that the lowest property at that time, at the end of last year, was £325 a month for a non-self-contained single room or bedsit, and the highest median price was £750. But in Cardiff, that spirals to over £1,000 for the average rent, and in many cases, as I've already suggested, it is much higher.

So, there are two ways in which we could introduce rent controls. First, we could protect families from unfair rent rises by giving them the option to challenge unreasonable rent through an independent tribunal system. This could be the Valuation Office Agency, as before, and this would guarantee fairness and predictability for both tenants and landlords. Alternatively, we could give local authorities the opportunity to apply to Welsh Government to create designated rent pressure zones in order to place caps on rent increases in areas that are determined to have been subject to excessive rent increase. The latter is the route being considered by Edinburgh and Glasgow following the Scottish Parliament passing the Private Housing (Tenancies) (Scotland) Act 2016.

But we don't have to just look to Scotland for inspiration. Many countries across the world have tightly regulated rental markets. Germany has its rental price break, which limits rents on new tenancies in property hotspots like Berlin, Munich and Dusseldorf to 10 per cent above existing rent benchmarks. It's worth noting that two thirds of people in Berlin rent. Tenants are heavily protected, but landlords are cut some slack, too. Rents can be increased if the property is improved and the break does not apply to newly constructed properties.

In New York, rent controls only apply to tenants who've lived there since 1971 and in properties constructed before 1947, but rent stabilisation also applies to nearly half of rented apartments, preventing landlords from hiking the price more than a set guideline for an area, unless, of course, they go for luxury decontrol, which is for properties above $2,500 a month, and, presumably, those people are better able to fight their corner themselves. But it does mean that half, rather than two thirds, of properties in New York are now subject to controls, compared with a lot more than that 40 years ago. Now, Paris recently introduced new rent controls. La loi Alur controls rents in zones of high demand, setting a median rent per square metre for a given area, separating districts' real estate into price bands based on whether it's furnished and the number of rooms. The application of these controls in other cities in France may follow.

Perhaps the most interesting example is that in Holland, which I want to look at in the context of our UK macroeconomic situation, which is that in the last year across the UK a record number of buy-to-let landlords are now paying in cash to hoover up more and more properties, according to the UK's biggest mortgage lender, Countrywide. The record £21 billion in cash purchases in bricks and mortar is at an all-time high for the last decade, and some of this cash comes from remortgaging, taking equity out of homes they already own, and a lot of it is heading towards Wales because the overheated London and south-east market is beyond the pockets of many investors. But we have to understand that this £21 billion that's going into bricks and mortar is something that could be going into the productive economy—creating jobs, creating goods and creating exports for our economy. And, meanwhile, the outcome of this deregulation is clear: bulging buy-to-let portfolios for the rich, with profits rising year on year and those not lucky enough to own their own homes are being fleeced.

So, I just wanted, lastly, to look at the situation in Holland, which is dominated by—. Three quarters of all homes are owned by housing associations, and the private rented sector in the Netherlands has declined from 17 per cent to 8 per cent. Strong regulation, particularly rent controls, is often seen as one of the reasons for the decline in private renting. But it's important to see that both owner occupation and social rented sectors have benefited from subsidies and tax incentives, while private landlords have been disadvantaged, especially from the 1980s. But, compared with other European countries, the social rented sector is thriving and people are generally content with it. I think that it's time that Welsh Labour really looks at introducing rent controls to fix this broken housing market, and, if necessary, increasing the size of the social housing sector to ensure that everybody can be appropriately housed, with the security that goes with it. So, I look forward to hearing the Government's response.

I thank Jenny for bringing this important subject to our attention this afternoon. We have a very clear approach, I think, from the left side of politics and you make some interesting and powerful points. I agree with you on a couple of issues. The housing market is, in areas, certainly dysfunctional and there are a number of reasons for that. We have this phenomenon of generation rent, where people who formerly would've bought their own homes now have to rent. They have relatively high incomes, many of these people, but they do not have the capital to make a purchase or put a deposit down, and I think they need security of tenure as much as what you call fair and controlled rents.

What I think we should have is a comprehensive review of housing policy and how it relates to the new demands we have. We are facing a shortage of supply; I think we all agree with that. I think we do need some more models. The Dutch example is an interesting one; it's capturing more people than we would capture in terms of what social housing here is deemed to be for, and there are ways of doing that through housing associations, possibly, or new ways in terms of co-operatives being formed, which is also a model favoured in many continental countries. I think we need all these approaches, and, when we eventually get out of the financial crisis, I do hope that this phenomenon of people chasing the high returns you can get by investing in housing does stop, because I do agree with you—housing is beyond the normal economic good. It's much more fundamental. It's much more like health in that respect. So, there are issues here. I don't agree with everything you've said this afternoon, but you might be surprised by how much I do agree with.

Thank you. Can I ask the Minister for Housing and Regeneration to reply to the debate? Rebecca Evans.

Thank you, Deputy Presiding Officer, and I'd like to thank Jenny Rathbone for bringing forward this debate today. Of course, I share her concern that everyone should have access to a good quality and affordable home, regardless of whether they buy or rent, regardless of whether their landlord is a social or private sector landlord, and regardless of where they live.

The private rented sector is playing, and, I think, will continue to play, an increasingly important part in delivering our housing agenda. It's been a growing market for a sustained period and now represents some 15 per cent of our housing stock. For people who rent, issues of affordability, quality and security of tenure are very real, and that's why this Government has placed great emphasis on ensuring that the private rented sector is well regulated and well managed, and we will continue to do so. In this way, we can help ensure that it offers a viable long-term solution for those people who choose or need to rent in the private rented sector. 

It's true that rent controls exist in many cities across the world. The question is: to what extent do they answer the particular issues that we face in Wales? Our Welsh housing market shares some but not all of the characteristics found elsewhere. The Cambridge Centre for Housing and Planning Research's 2015 study into the effects of rent control on supply and markets tested the two main approaches to rent control. One approach is to provide an absolute control over the rent level. The other is to allow the landlord to set an initial market rent, but limit rent increases. The research reported on the potential for unintended consequences in both approaches, and discussed how important the response of landlords would be.

Shelter has recently responded to calls for rent control by pointing out that absolute approaches to rent control were causing harm to the very people we seek to assist. If we reduce the returns landlords can receive, we risk incentivising them to sell rather than rent their properties, and this might benefit middle earners who would like to see more homes available to buy, but, for those who can't afford to buy, the unintended consequence might be greater homelessness as a result of the private rented supply shrinking.

Similarly, we would not want to inadvertently discourage private landlords from investing in the quality of the homes they offer for rent. Welsh Government rent officers report that, in the small number of instances where rent controls remain under the rental Act, properties tend to suffer from a lack of modernisation and maintenance, and we shouldn't be surprised that the profit motive negatively affects the behaviour of landlords when they're constrained in this way.

It's also worth remembering that housing is about the interplay of a complex system, and one of the consequences of restricting rents in one area could be the reduction of local housing allowances, and therefore the level of benefit available to disadvantaged tenants. This is because of where the thirtieth percentile sits. 

So, limiting rent increases as a form of rent control might provide less of a disincentive to landlords. However, historically, inflation within the Welsh private rented sector has been lower than in England. Since 2012, the index of private housing rental prices shows that growth has been, on average, 1.5 percentage points lower. The evidence suggests that the Welsh market is not stretching rents far beyond inflation.

Our focus has been on accentuating renting as a quality housing option. We have made considerable strides over recent years towards bringing the private rented sector and tenure law up to date. The vast majority of our private landlords provide high-quality property and a good service for their tenants. Rent Smart Wales has helped to spread these good approaches by making sure landlords are aware of legal minimum standards for property conditions and they know the expectations on them as landlords. Rent Smart Wales has been a very positive step. Eighty nine thousand landlords are now registered, which is a 98 per cent compliance rate, equal to that of vehicle excise. Eighteen successful prosecutions have now taken place, with significant fines being imposed. 

Our Renting Homes (Wales) Act 2016 will make it simpler and easier to rent. It also deals with the issue of retaliatory evictions, protects the tenancy rights of victims of domestic abuse and ensures that properties are fit for human habitation. It's an important improvement in the lot of over 1 million people who rent their homes in Wales. 

In March, we had the short debate on the use of no-fault notices, or section 21 notices. My commitment to working with landlords to build a vibrant rented sector cannot be at the expense of tenants. That's why I'm committed to working on this. Discussions with stakeholders have already begun, and I've met with Shelter Cymru to discuss our options. Several approaches are being explored currently, such as the extension of the notice period, providing incentives for landlords to identify a specific reason for notice should they seek a quicker possession.

Renting can be expensive in high-demand areas, such as parts of Cardiff. This reflects how difficult it is to afford to buy in these areas and we mustn't forget that the price of buying property also impacts on landlords who need a rental return on their investment, or else they can just sell the property and cash in any increase in the value of the property. Affordability is an issue that I'm keen to tackle, including how affordable it is to access the private rented sector or to move within it. That's why I've announced my intention to bring forward legislation very shortly to ban fees charged to tenants when they enter, renew or end a tenancy. 

So, what are the solutions that we should be grasping in our Welsh context? Again, Shelter's response to the rent control debate has been very interesting. They've pointed to the break in the link between rents and housing benefit, as a result of UK Government policy, which has made renting less affordable. Welfare reform is damaging and it's having a real impact on tenants and landlords. I've been very clear about our opposition to the UK Government's approach, which means that local housing allowances do not reflect the real cost of renting. This must change if the housing market is to operate effectively. 

We do not control welfare policy here in Wales but we do continue to do everything we can to ensure that the operation of the welfare system is integrated with our policy agenda. Discretionary housing payments provide support to vulnerable people, such as those we are assisting through the Supporting People programme. A number of authorities were not fully utilising their budget, so we worked with the authorities to develop a framework ensuring more consistent use of DHPs. This approach has been successful in reducing the number of authorities underspending their allowance from 13 to three in just one year. Now, we will work on those remaining three to ensure they're spending their allowance in full.

The other area Shelter points to is the need to increase the supply of affordable housing, ensuring that the whole housing system works effectively. I'm proud of the work we're doing in Wales on this and the progress that we're making towards our 20,000 affordable homes target. I recently announced an independent review of affordable housing supply, which will examine arrangements supporting the development of affordable housing. This review takes place against the backdrop of our longstanding commitment to increase the supply, which lies at the heart of our programme for government. I hope that it will allow us to set even more stretching targets in future, whilst also continuing to create a climate that drives up quality.

The Welsh way is to look for partnership where consensus is likely to deliver the outcomes that we seek. I believe that we have established a strong partnership with private sector landlords in Wales—a partnership where clear responsibilities, standards and professionalism are properly enforced and poor landlords are held to account, and where the rights of tenants are protected, whilst still offering incentives to the good landlord. So, I'm not afraid to regulate the sector where I feel it's necessary to do so and I share the concerns of others who have spoken today, and I'm always open to exploring ideas from here and from elsewhere—we've heard of a number of interesting models from other countries—whilst in the end settling on the solutions that suit both our Welsh housing market and our Welsh partnership approach. Thank you. 

Thank you very much. And that brings today's proceedings to a close. Thank you. 

The meeting ended at 18:44.