Diolch, Llywydd. Yesterday, I laid the Renting Homes (Fees etc.) (Wales) Bill, together with the explanatory memorandum, before the National Assembly for Wales. I am pleased to have this opportunity to make a statement about the Bill. Members will know that we are committed to removing barriers to entering and moving within the private rented sector. 'Prosperity for All', our national strategy, recognises that people cannot live well without good quality, affordable homes. We want to make renting privately a positive choice that is widely accessible. To that end, I believe any costs associated with renting must be reasonable, affordable and transparent.

Sadly, evidence shows that the current fees charged by letting agents often present a significant barrier to many tenants. This is especially so for people living on lower incomes, including young couples starting their lives together, students living on restricted incomes, or single parents struggling to make ends meet, for example. Fees can result in individuals or families borrowing money from friends or relatives, struggling to pay bills, or getting into debt. They may become overdrawn or, in the worst cases, may turn to payday loans or doorstep lenders. We know that tenants often experience the same level of service from agents, but see wide variation in what they are expected to pay. It's questionable whether the costs incurred are consistent with the fees that tenants are required to pay. And, in any event, landlords also pay agents for lettings and property management services. The requirement to pay these fees also makes it harder to plan for a tenancy, which in turn affects the affordability and accessibility of the private rented sector. Tenants are not inclined to challenge or bargain with agents, often due to desperation to find a home in the face of competition from other tenants. Tenants are also in a position where there is almost always only one agent managing a property, meaning that they have no choice but to pay the fee demanded from that agent if they want to rent the property. 

To address these concerns, the Bill will make the costs tenants face in future significantly lower and simpler to understand. The Bill is drafted in the light of the Renting Homes (Wales) Act 2016, and therefore applies to contract holders. No longer will they be charged for an accompanied viewing, receiving an inventory, or signing a contract. No longer will they be charged for renewing a tenancy. And no longer will they see a range of services added to their contract as check-out fees when they move out. Payments will be much more predictable, limited to rent, security deposits, holding deposits and payments in default. I expect most contract holders will only ever need to think about paying their rent and finding a security deposit. The Bill also guarantees that holding deposits are capped to a week’s rent. This is the level that most tenants currently pay, but I want to ensure that the costs they face at the beginning of their rental contract are kept to a minimum. Similarly, most tenants currently pay the equivalent of around a month’s rent as a security deposit, which I think is reasonable. However, the Bill provides for a regulation-making power regarding the amount of a security deposit. This safeguard has been provided to ensure we can avoid costs rising to an unreasonable level.

Many agents and landlords will recognise the purpose of the Bill, which will ensure that we see the change in practice in the private rented sector that I know Members have been calling for. If, in future, an agent or landlord requires payments that have been prohibited—that is, payments other than permitted payments—they will commit an offence. We have also provided local housing authorities with powers to investigate offences and to prosecute people who obstruct those investigations, for example by providing false or misleading information. 

The implications of committing an offence are serious. Local housing authorities may offer a fixed penalty notice of £500 to discharge liability to a person they believe has committed an offence of requiring a prohibited payment. If the penalty is not paid, prosecution through the magistrates' court may follow. A person guilty of an offence of requiring a prohibited payment is liable on summary conviction to a fine. The Bill requires a local housing authority to notify the conviction to Rent Smart Wales, the licensing authority designated under the Housing (Wales) Act 2014, as soon as it becomes aware of the conviction. Contravening the ban on fees may mean the withdrawal of a licence to carry out lettings or property management work. Therefore, it is in a person’s best interests to ensure that they comply with the Bill. Let me be very clear: agents and landlords might be putting their business at risk if they are convicted of an offence.

It is my pleasure to introduce this Bill for scrutiny by the Assembly. I very much look forward to engaging with the Assembly and the Assembly's committees over the coming months on a Bill that I hope will prove to be an important milestone in improving the lives of hundreds of thousands of people in Wales who currently rent in the private rented sector. Diolch.