We move now to item 6, a debate on a Member's legislative proposal on rent control. I call on Mabon ap Gwynfor to move the motion.

Motion NDM7831 Mabon ap Gwynfor

Supported by Rhys ab Owen, Sioned Williams

To propose that Senedd:

1. Notes a proposal for a Bill on rent controls.

2. Notes that the purpose of this Bill would be to:

a) help combat some of the more severe effects of Wales’s housing emergency, affecting over a million people across the nation;

b) mitigate significant future rent increases, such as those seen in the rented sector over the last 12 months;

c) introduce a system which restricts rents and rent increases to affordable levels and local factors, closing the gap between wage growth and the cost of living.

Motion moved.

Thank you very much, Dirprwy Lywydd. [Interruption.] Thank you for the welcome. I have to declare an interest at the beginning of the debate as someone who owns another property occupied by a tenant. So, why am I, of all people, putting forward a motion to control rents? Well, simply put, because this is the right thing to do.

There are pressing crises that have happened throughout history that lead to a financial squeeze that in turn leads to poverty. This is true without exception, and history is testament to the fact. At times of pressing crisis, Governments take action to show that they are there to protect and help, through providing a shield against the worst impacts.

Let us take one example from history. Following the second world war, what did Clement Attlee and Aneurin Bevan do? Well, they went about implementing the recommendations made in the Ridley report and strengthened rent controls, and embarked on a major programme of building public housing. Aneurin Bevan himself spoke about the need to safeguard tenants. And the people of Wales look to us today to do what we can to prevent them from falling into poverty following the huge post-COVID challenges. We don't know what the full impact of COVID will be yet—the picture will become clearer as time goes on—but we are starting to see its detrimental effect already, on top of over 10 years of stifling austerity. Wages have failed to keep up with inflation, inflation is about to hit its highest level for 30 years, and the cost of living is on the rise. But, on top of all this, rents have increased more in Wales than in any other part of the United Kingdom, with an increase of almost 13 per cent in the past year alone.

Over half the children who live in rented homes live in poverty. The percentage of people who live in poverty in the rental sector is higher in Wales than in any other part of the United Kingdom. Cardiff is having a particularly hard time, with the Joseph Rowntree Foundation estimating that many spend 35 per cent of their income on rent alone. Young people can't afford to buy homes in their communities and waiting lists for social homes are very long. So, the only option is to rent privately or, for some, unfortunately, to live with their parents. It's little wonder that ONS figures show that a third of people between 20 and 30 years of age live with their parents here in Wales. Shelter Cymru has seen rents doubling in a month in some cases, and Acorn in Cardiff has seen landlords demanding more than an extra £100 per month in rent from their tenants. Without intervention, we will see more and more people finding themselves living in poverty or even becoming homeless.

I know that some will take fright at reading the motion and will instinctively oppose it, referring to examples where policy under the heading 'rent control' has failed. And that's true; some experiments have failed. But when they are designed in the right way, when they're targeted and when they dovetail with other successful policies, then rent control is a policy that succeeds and is popular. And they're popular today, with over two thirds of people supporting a policy of this kind in the United Kingdom, according to a recent YouGov opinion poll. Note that the motion does not propose a particular kind of rent control system, but it does note the need to impose controls on rents to a level that meets the ability to pay.

Let's look at some examples. The Government of the Republic of Ireland is not known for being particularly left wing; indeed, it is a more right-wing Government. But there, they have taken steps to control rents, with a rent review no less often than every two years and a 90-day period of notice of change. They have rent pressure zones in areas where the pressure is particularly high, which mean that rent cannot increase above the rate of inflation in those areas. In Catalunya, the Government there has introduced a regime that limits rents for specific cohorts of people, for example if rent equates to 30 per cent or more of their income. And, of course, rent controls exist in different states across the United States, having been introduced in a targeted manner.

It's clear, therefore, that careful preparatory work is vital to ensure success of this kind of policy. That's why I'm exceptionally pleased that this Government today has come to an agreement with us here in Plaid Cymru to look at the possibility of introducing rent controls as part of a wider package in a White Paper on housing. This will be the first step on the legislative journey to ensure that there's fairer housing here in Wales for our people.

This proposal, therefore, is an opportunity for an initial discussion on the potential for a fair system of controlling rents here, and the contribution that this could make to our wider objective of guaranteeing tenants' rights—people's right to live with a roof above their heads without the threat of homelessness casting a shadow over their lives. It is also a statement of a fundamental principle—that there is a fundamental injustice in our current housing regime, which is that people are living in poverty while a very small group of people profit from them.

I ask Members of the Senedd, therefore, to support this motion today, and to empower the Government to start the preparatory work to lay the foundations for the introduction of a rent control system, alongside our wider work to ensure that everyone has the right to a home here in Wales. Thank you very much.

I refer Members to my own declaration of interests, and indeed will be declaring an interest on this debate. I will also be voting very firmly against this legislative proposal, and it doesn't take away the fact that I know the work that you've put into this. There is actual clear evidence that rent controls can have large negative effects, both on landlords, tenants and, indeed, the quality of housing stock. San Francisco's 1994 rent control law led to a 5.1 per cent increase in overall rents over the course of the next two decades. The overall rise in rents created a cost of £2.9 billion accrued to current and future renters, and landlords substituting to other types of real estate, which then lowered the housing supply, shifting it towards less affordable types of housing.

Now, we're already seeing a pattern that's quite worrying in Wales. Private landlords, financial brokers, are telling me that they or their clients are fed up now with so many controls being placed upon them, when all they want to do is provide good-quality accommodation for a fair rent in return. Many are now selling up their stock or moving over to the holiday let. In fact, between 2018-19 and 20-21, Wales has seen over 4,500 private landlords leave the sector. And, Minister, you can shake your head, but I have that figure, firmly, provided to me by Rent Smart Wales themselves, in black and white.

Now, last week, I chaired an estate agents round-table, and it was made clear that there is an agent in south Wales that manages over 4,000 units, and they know for a fact that owners are voting with their feet and actually leaving the rented sector. Your proposal, Mabon, would make that wave a tsunami of landlords leaving, and the casualties will be the very people that you actually think you're trying to help. Studies have shown that rent controls lead to a deterioration in housing quality, resulting from landlords' reduced income and an inclination to keep the upkeep of the housing. Germany introduced a nationwide system of rent controls in 2015, but according to research, this had no persistent effect on rental prices, instead resulting in reducing housing quality.

Now, Dr Simon Brooks has made it clear that providing a sufficient supply of rental accommodation is particularly important in towns such as Llangefni, Holyhead, Milford Haven, Haverfordwest, and Caernarfon and Bangor in Gwynedd. There is no greater example of the failure of socialism in Wales than the absolute carnage that Welsh Labour and Plaid Cymru are making of our housing sector. As was made clear in my estate agents round-table, they believe that you are just driving the quantity of stock available for tenants to rent—

Janet, can you conclude now, please?

This legislation will be the final straw, and will see the very people that you think you are trying to help worse off. I would ask all Members to support tenants themselves, landlords, and to ensure that our housing stock doesn't deteriorate further, and vote firmly against this. Diolch.

I actually believe in rent control, and I don't own any houses apart from the one I live in. With a shortage of rental properties compared to demand, then without controls, rents will increase continually. With large-scale council house building pre-1979, the private rented sector declined. The private rented sector began to grow again after 1989 and is now the second-largest tenure in the UK after owner-occupation. Increases in the private sector rent levels and a focus on reducing housing benefit expenditure have led several commentators, and I agree with them, to call for the reintroduction of some form of private sector rent control. The Rent Act in 1965, introduced by the Labour Government led by Harold Wilson, regulated tenancies, with fair rents set by independent rent officers. That ended with the Local Government and Housing Act 1989, brought in by the Conservatives, and we mentioned 1989 earlier, as the date at which the increase in private rented accommodation started to go up.

What are the benefits of rent control? Affordability, it prevents displacement, neighbourhood stability. The argument that is made—Janet Finch-Saunders made it, which I voted out before she even spoke—I expect is that it reduces availability of rented property for stock renovation and improvement. Firstly, the high rent of privately rented properties has driven out first-time buyers. But I'll just talk about the area I come from of Plasmarl in Swansea. Initially, it had large numbers of privately rented properties, but, as council houses became available, my family, like many others, moved to these new council houses, and the housing left behind was sold, and many people, via a mortgage, became owner-occupiers and then undertook improvement of those homes. Now, these properties are bought and made available for private rent. I must have missed the large-scale renovation of the cheaper privately rented properties in east Swansea.

Alongside rent controls, we do need the large-scale building of social housing. In fact, I talk about that probably more often than people would like to hear it from me, but we need to build council houses at the rate we built them in the 1950s and 1960s. Rent control increases the availability of houses to be bought by people to live in, reduces the cost of rental, gives security on rental costs, removes the incentive to move one tenant out to bring one in paying a higher rent. I urge everyone to support this today. This is, effectively, a Labour policy; it's something that the Wilson Government brought it, which worked very well at rolling back the tide of fairness to poor and less well-off people, but the Tories in the 1980s got rid of it. We've got an opportunity to bring it back in now for the benefit of all the people renting in Wales. I urge everybody, especially my Labour colleagues, to support what is effectively a socialist solution. 

The need for shelter is one of the most basic human needs, but this need can be exploited. Many of the problems that we discuss day in, day out with our constituents are related to the housing emergency that has engulfed our communities. Because be in no doubt, this is an emergency, and it is hitting the poorest and most vulnerable in our society the hardest. We must act to protect them. 

Housing is the single largest living cost faced by most families in Wales, and uncontrolled increases in rents are forcing too many tenants to pay landlords an unreasonable and ultimately unsustainable proportion of their limited income. The picture painted by the statistics quoted by Mabon ap Gwynfor reveals the extent and deepening negative effect of unaffordable unfair rents, which disproportionately hit those on low incomes, deepening inequality, exacerbating already too high levels of poverty. And we know that women, people from ethnic minority backgrounds, young people, refugees, migrants, disabled people and LGBTQ+ people are all disproportionately affected by economic structures that penalise those on low incomes, whilst also facing discrimination as regards access to housing. 

As we've heard from Mabon ap Gwynfor, rents have increased by almost 13 per cent in Wales over the last year. Shelter Cymru's casework has seen cases of severe increases, in one instance by as much as 100 per cent per month. And the consequences for those unable to afford these increases are dire, often leading to problem debt, eviction, homelessness. Wages have not increased accordingly, and with fuel prices skyrocketing, as well as the rising cost of everyday essentials, the need to act to ensure an end to the way uncontrolled rents are contributing to the cost-of-living crisis and wider social inequality is urgent.

Economic justice is an equalities issue. The actions of those of us on the progressive wing of politics must match stated ambitions. As Mabon mentioned, we have an opportunity here to put in train the first steps of meaningful action to help tenants, such as considering targeted rent controls, and supporting the Government's White Paper on housing, and, in doing so, carry the mantle of the giants of Wales's radical tradition. Fellow Members, let's show we are the inheritors of that radical tradition. 

Poverty limits your freedom to enjoy an enjoyable and authentic life, but even the possibility of being plunged into poverty or losing your home is enough to curtail your freedom. So long as landlords continue to have the capacity to arbitrarily raise rent, tenants will continue to live under a dark cloud of economic uncertainty. This motion is an indication that we as a Senedd would stand up for the rights and freedoms of ordinary people to be able to live their lives without that constant threat. The housing crisis is the result of an economic system that is designed to protect the wealth of the few not the needs of the many, and without mitigation, such as a form of rent control, the system will remain intact. Diolch.

I should declare an interest as somebody who's currently renting a property.

Well, comrades, I never thought I would see the day that I would stand here this afternoon to fight against rent controls. Where have they worked? Where have they been a success for the people you claim they would help? No-one's told me so far, because the answer is they don't work. No-one is denying there are significant pressures for the housing market and there is a lack of homes for young people. However, the answer cannot be more red tape and more regulation because we are in this position now because of red tape and regulation. Across the whole of Wales in 2021, under this Welsh Labour Government's watch, your own draft budget highlighted a measly 4,314 new dwellings were commenced, and it's not going to get any better with the Natural Resources Wales's phosphate guidance stopping people building houses.

Rent controls and more red tape will not address the housing crisis, but they may make the housing crisis worse. There are landlords in this room today and wider who know that, if rent controls are introduced, some of those people may struggle to pay mortgages on those properties, they may struggle to pay the upkeep of properties, tenants will be evicted as those homes go on the open market and, yet again, we'll see more homes going on Airbnb. Rent controls pose a real risk to destabilising the market, and you all know it. Policies like these are just headline grabbers, they don't work, and people always find a way around the regulations. 

Young people need access to affordable homes, and we need to do that by deregulating and lessening the burden on the house-building sector, Minister, and let's get building, building, building. 

I have long supported rent controls and I back any move to address the poverty caused by unreasonable rent increases. The UK's housing market has been in crisis for decades. The fundamental foundations of the system have been broken. The idea that everybody should be entitled to a roof over their head, like so many other areas of our economy, is now subordinated to the whims of market forces and the pursuit of profit.

When Margaret Thatcher came to power her Government withdrew funding for councils to build economically productive housing, instead choosing to support rents and mortgages instead. The disastrous right-to-buy further entrenched market dogma into UK housing policy. Most of the houses sold under this policy were never replaced. It represented a mass sell-off of state assets into the private sector. This ripped up decades of mainstream political agreement on the need for councils to provide social housing.

Starting with Clement Attlee's Labour Government, the state provided funding to councils to invest in increasing social housing and, for decades, hundreds of thousands of social rented houses were built on average every year. Economically, the justification was obvious, mass scale home building meant that house prices and rents remained affordable because of high supply. When housing is viewed as a financial investment, the opposite is true. There is pressure to restrict supply in order to drive prices up, maximizing the profits of those who own the assets. Where house building does take place, it is now largely left to private property developers whose prime motive is to make profit for their shareholders.

The rapid and unsustainable growth of a class of buy-to-let landlords since the 1980s has not only undone much of the progress in conditions of tenants but has driven an explosion in house prices. The increased prices combined with the low supply lead to ever-increasing rents. Rent controls offer one of the most potent tools we have to address this situation. They aren't without precedent, they are fairly common across Europe. In 2016 the Scottish Government brought in the power to impose controls on rents, and in Wales we must learn the lessons of the failings of the Scottish approach, which were caused by a disappointing timidity and lack of ambition. The aim of rent control should be, first and foremost, to protect tenants. As a longer term aim, it should discourage the hoarding of property by buy-to-let landlords and increase those looking to sell. This will provide an increase in supply, allowing tenants to buy their own houses. The Welsh Government's ongoing expansion of social housing will ensure a home for those who do not wish to buy or who remain unable to, and I look forward to the White Paper and I'm pleased the Welsh Government will be embracing rent controls, as promised in the manifesto. The effects of the housing crisis are felt most acutely by the young and the working class. If we fail to act, we will consign tomorrow's young to a future without housing security. Diolch.

I call on the Minister for Climate Change, Julie James.

Diolch, Dirprwy Lywydd. In noting the proposal in the motion for a Bill on rent control, I think it is really important to set out the commitment in the programme for government. The commitment in the programme for government reflects the commitment in the 2021 Welsh Labour manifesto to develop a national scheme restricting rents for families and young people priced out of the private rental market and those who are homeless or at risk of homelessness. The programme for government commitment now also reflects the inclusion of rent control in the co-operation agreement with Plaid Cymru.

Our commitment is to publish a White Paper on fair rents and new approaches to making homes affordable for those on low incomes. In line with the co-operation agreement, that will include proposals on rent control. As many of you know, though, rent control does have a somewhat chequered history, with many previous interventions not having had the planned benefit, or indeed having some serious negative impacts. We know, for example, that the rent pressure zone legislation introduced in Scotland has not yet been used, and measures introduced in Ireland have had to be substantially redesigned, as they've been criticised for having led to rent increases and a contraction in supply.

However, there are good examples around the world of rent controls working in the right way for the right purposes. I have to say to the Conservatives opposite that their 'phosphate crisis', as they call it, that is preventing the build, build, build approach is in stark contrast to their stated commitment to climate and nature emergencies.

No, it's not—[Inaudible.]

How on earth you think that we can have rivers full of phosphates and build substandard housing all over green land in Wales and have a coherent approach to the climate and nature emergencies, I really cannot understand. So, you just really need to take a good look at yourself and get a coherent approach to this.

I have met with a large number of interested private sector investors who really like the approach that we have here in Wales. They want, of course, because they are decent human beings, to make sure that they contribute to ensuring that everyone in Wales has access to a decent, affordable and safe home, because they are very well aware that housing is not just about profit. So, I think you are hanging out in the wrong crowd entirely over there on the very right-wing Conservative benches.

So, we think the approach set out in our programme for government is the right way forward. We will be shortly commissioning independent research so that we can all understand what measures have the best chance of success. Building on that research, we will then produce a White Paper containing the policy proposals, which will be the subject of a consultation.

We are, of course, wholly committed to ensuring that everyone in Wales has access to a decent, affordable and safe home. Pivotal to this is ensuring that rents are affordable, and we are, of course, acutely aware of the cost-of-living crisis facing so many people in Wales. As I said in a debate, Dirprwy Lywydd, only yesterday, the Tories on the opposite benches, whilst shouting from sedentary positions at me are also the party that have frozen the local housing allowance, making sure that people do not have access to affordable rents in the private rented sector if they're on benefits. Really, you need to take a good look at yourselves.

We are putting a raft of measures in place already, including our commitment to building 20,000 new low-carbon social homes for rent. In terms of the private rented sector, I've already referenced the national leasing scheme. This builds on our successful pilot to enable local authorities to lease properties from private property owners for between five and 20 years. We have a large number of private investors interested in this. Local authorities will provide these homes at affordable rent to those who would otherwise face potential homelessness. They will provide the support tenants need to sustain their tenancies and thrive in their homes.

More broadly, of course, and I just remind Mabon, who didn't quite remember this in his speech, implementation of the Renting Homes (Wales) Act 2016 will transform the landscape for tenants and considerably strengthen their rights. Providing they don't breach their contract, tenants will have a right to six months' notice if the landlord seeks to end the contract. That notice cannot be served in the first six months, so they'll have security of at least a year after moving into their home. The renting homes Act will provide greater security than elsewhere in the UK for all tenants. There are, of course, many other important provisions in the Act, including around improving the quality of rented homes and making sure that they are fit for human habitation.

We will publish a Green Paper later this year, as the next step in bringing forward ending homelessness legislation, that will fundamentally reform homelessness services to focus on prevention and rapid rehousing. In terms of the commitment to publishing a White Paper reflected in our programme for government, this will explore the role rent control can have in making the private rental market more affordable. It's an extensive and complex area of policy and law and it's essential to gather the evidence, including international models of rent control and the experience and impact of measures taken in both Scotland and Ireland, which Mabon referenced. It's important we learn from the approaches taken in other countries, and in particular this will include understanding what has worked well where rent controls are in place and what has not worked, and, critically, as Carolyn Thomas mentioned, any unintended consequences, so that we can iron them out in the measures that we take.

As I indicated, for example, in Ireland, the legislation was introduced allowing rents to increase to a maximum of 4 per cent in rent pressure zones, but actually it turned out that inflation was lower than that, and the 4 per cent became a target rather than a cap. So, we need to craft our legislation carefully so that we don't have rigid boundaries in place and we can calibrate it across the piece. Anecdotally, the measures there are linked to an increase in evictions, of course, because they have then got a ceiling instead of a cap, which we need to guard against. 

We will commission the independent research into the rent controls so that we do pick up the very good examples that we have. Mabon referenced Catalonia, for example, and we know that that's been successful there. Engagement with partners and citizens will be a very important part of this research, which will then inform the policy proposals to be included in the White Paper. 

So, in summary, Dirprwy Lywydd, I fully support the drive to increase the access to affordable homes and to make this the right of every person in Wales. It is, though, critically important to explore what is the most effective way of achieving this and securing more decent and affordable housing. The White Paper will be underpinned by the evidence gathered and provide robust options for future legislation on new approaches to ensure rental affordability. Diolch.

I call on Mabon ap Gwynfor to reply to the debate.

Thank you very much, Dirprwy Lywydd, and thank you to everyone who has taken part in this discussion. Thank you to the Minister for her comprehensive response.

I'm interested, I have to say, in the responses of the Conservatives. I'm thinking sometimes that they have written a speech ahead of time and haven't paid any attention to what has been said, because whilst one acknowledges—the Minister herself has acknowledged—that there are weaknesses with rent controls, and I've said that, in some cases, there are examples of rent controls succeeding, and very prominent examples of that.

And we know that, in order for rent controls to succeed, they have to be coupled with a range of other policies, not least of which is build, build and build, as Mike Hedges said too. But, in talking about building, we have to accept that your friends in the Conservatives in private sector construction wouldn't meet demand, of course, because they are interested in creating profit only. We have to ensure that public housing is built once again, empowering our local authorities to enable them to rebuild council homes once again to meet the demand, because the lack of stock at present means that some of the rogue landlords, who want to take advantage of people, they know that they can increase rent levels consistently. James.

Do you not agree with me, then, that the Welsh Government's phosphate guidance is going to stop council house building and social house building in certain parts of Wales?

Well, that is a concern, that that policy does mean that a number of social homes down in the Teifi valley and in Monmouthshire won't be built at the moment, but it's a matter for the Government to respond to that point.

But I am very pleased to hear that the Government has commissioned a consultation into this, and I very much welcome that, because, if the policy is going to succeed, as we've learnt from Clement Attlee onwards, if it's going to succeed, it has to be a policy that's been investigated thoroughly and is dovetailed with other policies. So, I'd very pleased, Minister, if I could see the terms and guidance for that work. But let us today declare our support for this policy in its wider sense, that we want to see steps being taken, support that the Government is doing this with this research and will bring forward a White Paper and ensure that there are affordable homes for people in our communities here in Wales. Do support the motion. Thank you very much.

The proposal is to note the proposal. Does any Member object? [Objection.] There is an objection. I will therefore defer voting until voting time.

Voting deferred until voting time.