Item 5 will be the next item this afternoon, and that is the Renting Homes (Wales) Act 2016 (Amendment of Schedule 9A) Regulations 2022. I call on the Minister for Climate Change to move this motion—Julie James. 

Motion NDM7917 Lesley Griffiths

To propose that the Senedd, in accordance with Standing Order 27.5:

1. Approves that the draft The Renting Homes (Wales) Act 2016 (Amendment of Schedule 9A) Regulations 2022 is made in accordance with the draft laid in the Table Office on 12 January 2022.

Motion moved.

Diolch, Llywydd. These regulations form part of a wider set of statutory instruments that I am laying to support the implementation of the Renting Homes (Wales) Act 2016. Members will be aware from my written statement last month that the Welsh Government's intention is that all of the provisions of the Act will be commenced in July of this year. To enable this to happen, a number of statutory instruments will be required to support the day-to-day operation of the Act. For example, I have already laid SIs that set out the information that landlords must provide to all contract holders in future, and regulations that will ensure that the accommodation landlords let is fit for human habitation.

The Schedule 9A amendment regulations before us today help to ensure that landlords are meeting their responsibilities with regard to the standard and safety of their properties, and are related to the fitness for human habitation requirements. Schedule 9A to the Act already restricts landlords in certain circumstances from exercising a landlord's break clause in a fixed-term standard contract, or issuing a landlord's notice under section 173 or section 186 of the Act to end a contract where the contract holder is not at fault. An example of one of these circumstances is where the landlord has failed to comply with the statutory requirement to provide the contract holder with a written statement of their occupation contract. 

The Schedule 9A amendment regulations will add four further restrictions on a landlord's ability to issue a landlord's notice or trigger a break clause. These are: if an energy performance certificate has not been provided in relation to the property being let; if hard-wired smoke alarms and carbon monoxide alarms have not been fitted; or if a valid electrical condition report or a gas safety certificate have not been provided in relation to the property. If a landlord has not met these requirements they will not be able to serve a no-fault notice or trigger a break clause. Our aim in making these regulations is to encourage landlords to meet the important obligations relating to the safety of energy efficiency of the properties they let, and we are seeking to achieve this by restricting any landlord who has not complied with these obligations from being able to issue a no-fault notice to end a contract or to trigger a break clause in a fixed-term contract. This restriction will apply until such time as they have put things right. 

In summary, these regulations should be seen in the context of our overarching aim of improving security of tenure for contract holders who have not breached the terms of their contract, and our wider drive to support the increasing professionalisation of the private rented sector and to provide a safe home for everyone in Wales. I've noted the points raised by the Legislation, Justice and Constitution Committee in relation to these regulations and have responded to the committee on all of the points raised. I ask Members to approve these regulations today. Diolch.

I call on the Chair of the Legislation, Justice and Constitution Committee, Huw Irranca-Davies. 

Thank you, Llywydd. With your invitation, this will the first of five speeches I will give in relation to scrutiny undertaken by my committee in recent weeks. I will therefore aim to keep my contributions focused. 

I'll try to keep this as short as possible. We considered these regulations at our meeting on 31 January, and our report to the Senedd contains two merits reporting points. These regulations, as the Minister has said, amend the Renting Homes (Wales) Act 2016 to place two further restrictions on a landlord’s ability to issue a notice seeking possession—first, if an energy performance certificate has not been provided, and, second, if certain health and safety requirements have not been met.

We noted in our report that regulations 3 and 4 prevent a landlord from giving notice if there are breaches of certain statutory obligations. Any provision that interferes with an individual’s property, or use of that property, will potentially engage article 1, protocol 1 to the European convention on human rights. The explanatory memorandum does not contain a justification for the interference with human rights. So, as such, we asked the Welsh Government to provide details of the human rights assessment that it undertook in relation to these particular regulations. In its response to our report, the Government explained that, provided a landlord is in compliance with the two statutory obligations, any harmful effect is mitigated. As such, the Government was satisfied that the regulations are indeed compatible with the convention on human rights.

Our second reporting point drew attention to the use of Henry VIII powers. It won't only be this Minister that's familiar with us drawing attention to these. These regulations amend primary legislation, in this case the Renting Homes (Wales) Act 2016. During Stage 1 scrutiny of the then Bill, our predecessor committee sought clarification in relation to the justification for the use of these Henry VIII powers. The then Minister’s response stated that the Government needed to have the flexibility to react to how the housing landscape evolves over time and to make appropriate provision as necessary. In its response to our reporting point, the Government noted the response to our predecessor committee’s request for clarification on the use of such powers, but indicated it had nothing further to add. So, I think we'll have to call this a score draw for now. 

Thank you, Llywydd, and thank you, Minister.

I would like to refer Members to my own declaration of interest form regarding property ownership.

Minister, I thank you for laying these regulations, and can confirm that we will be voting in favour. Energy performance certificates should be provided as a bare minimum and the requirements of the Renting Homes (Fitness for Human Habitation) (Wales) Regulations 2022 should certainly be met. In fact, it is only common decency to also expect landlords to install carbon monoxide alarms. Every year, there are still approximately 30 accidental deaths from acute carbon monoxide poisoning in England and Wales, and over 200 non-fatal poisonings requiring hospital admission.

I can see no objection either to obtaining an electrical condition report. This could be a positive step in ensuring that our nation sees fewer electrical fires caused by wiring, cabling and plugs. Across Wales, there were 772 incidents between 2014 and 2019. One of the aims of the regulations is to prevent landlords from attempting to take so-called retaliatory evictions in situations where a contract holder has brought to their attention an issue of safety or disrepair—quite rightly. Safety issues, disrepair and any inadequate housing leading to dangerous situations must be addressed. 

The explanatory memorandum states that the Welsh Government has undertaken a considerable amount of work in recent years to tackle poor practice by landlords in Wales. This includes a landlord registration and licensing scheme designed to raise professional standards in the sector. Now that this scheme is, I think, about five years old now, even if it's not today, I would like the Minister to make a statement at some stage as to the benefits to both landlords and tenants that Rent Smart Wales has actually brought. We know now that there have been 4,584 deregistrations or deactivated landlords in Rent Smart Wales between 2018 and 2021.

Whilst I acknowledge that you had a public consultation on increasing the minimum notice period for a no-fault eviction in 2019, I would still have some concerns that no formal consultation has been undertaken specifically in relation to these regs. It is clear from the stakeholder groups that I hold and speak to within the sector that there is still this divide between them and the Welsh Government. It would help greatly if you could use every possible opportunity to engage and co-operate with them. Therefore, should further regulations in relation to the rental sector be forthcoming, will you assure the sector that there will be a fresh opportunity for them to be consulted? Diolch. 

Mabon ap Gwynfor. Mabon ap Gwynfor.

Thank you. I didn't hear you clearly—I'm sorry. Thank you very much, Llywydd, for that. May I also declare an interest and draw your attention to my register of interests, please? These regulations are a significant step in the right direction to improve the quality of housing in Wales. We will therefore be supporting this proposal today, but I would seek clarification on some points, please, from the Minister. 

The regulations set out limits on the issuing of notices. If a landlord does not reach the required standards, they are encouraged to comply with the requirements to be able to give the tenants notice. But what about those tenants who are locked into poor-quality private accommodation, and who aren't in a position to leave because of financial circumstances or other reasons? If they don't give notice or the landlord doesn't do so, then what will encourage the landlord to ensure that the accommodation reaches the standards required at that point?

In terms of efficiency, you will know that Wales has the oldest housing stock in this state, and it is the private rented sector that has the oldest housing stock too, with a higher percentage of poor quality homes. And the percentage of homes in the private rented sector has increased significantly since 1981. The Welsh housing conditions survey 2017-18 showed that it has taken 10 years for the average efficiency band to improve from band E to band D. Naturally, flats were the most efficient homes, with 55 per cent of flats achieving band C energy rating or better, as compared to only 25 per cent of houses that reach the same level. And the houses in our rural communities are even less efficient. So, what steps are the Government taking to accelerate the process of improving the quality of housing in Wales, bearing in mind that it has taken 10 years to improve energy efficiency from one band to another? How will the Government target its actions to ensure that efficiency improves in the least energy-efficient areas, particularly our rural communities?

These regulations will certainly lead to lengthy and complex contracts for tenants, with a large number of regulations incorporated into the contract between the tenant and landlord. How can people understand what their rights are in such a lengthy document? So, what steps are the Government taking to simplify the process, or what support will be available to ensure that tenants understand their contracts?  

Finally, in terms of the legislation more widely, you will know that the legislation, as it currently stands, makes it very difficult for those religious denominations that let homes as a manse for their ministers, vicars or religious leaders. Some denominations have started to sell their properties because of these difficulties. A notice period of six months is shortened to two months for people employed by the company that owns a property, but that does not apply to religious denominations. Will you consider amending the legislation further to reflect the employment status of ministers, vicars and religious leaders, or would you be willing, Minister, to meet with Cytûn and me in the near future to discuss the situation further? Thank you very much.   

The Minister to reply to the debate—Julie James. 

Diolch, Llywydd. I've already addressed the issues on the Human Rights Act in terms of the LJC committee. We are very satisfied that the Act complies with all of the human rights legislation, as Huw set out.

In terms of the points that Janet made, the number of landlords fluctuates over time as new landlords enter the market and others leave. So, she's quite right in saying that figures from Rent Smart Wales indicate just over 4,500 de-registrations over the past three financial years, some of which could of course have been incorrect duplications. There were also nearly 30,000 new landlord registrations during the same period. It's always good to read to the bottom of the page, I say.

So, there's no direct link to the number of private rental properties as the number of properties held by each landlord can also change. I understand that the latest figures from Rent Smart Wales indicate that the number of PRS properties is similar to the published dwelling stock estimates, which have remained at just over 200,000 since around 2015—so, despite the dire warnings about the same in the stock. Obviously, the changes in legislation may introduce some resulting reduction in the flexibility a landlord currently has, but the legislation will not significantly affect the most important driver for investment in the private rented sector, which is of course the rate of return on the investment.

In terms of Mabon's first point, the Act already provides for a new fitness obligation on landlords, and protects tenants against retaliatory eviction if they seek repairs. There is plain language guidance on the contract, which will be available. I have already considered the religious orders point, Mabon. We had an extensive conversation during the passage of the amendment Act with them, and I've advised the church that if it, or any other denominational faith group or ministers or faith leaders, require advice as to the application of the law to their particular arrangements, they will need to seek that independently. That should then be discrete as to the application of the law. It will be a matter for the courts to make the determination.  

So, I'm afraid that I have no intention of excluding properties occupied for ministers of religion or other faith leaders, for that matter, nor of retaining a two-month landlords' notice period for church-owned properties, as I consider that people who are tenants of the church are entitled to the same amount of protection as other people. Other than that, Llywydd, I think that I covered all points in my opening remarks, and I commend the regulations to the Senedd.

The proposal is to agree the motion. Does any Member object? There are no objections. Therefore, the motion is agreed, in accordance with Standing Order 12.36.

Motion agreed in accordance with Standing Order 12.36.