Part of the debate – in the Senedd at 5:05 pm on 12 October 2022.
'speaker Adam Jones advised landlords to issue “smaller, regular rent increases” instead of large, more sporadic hikes'.
It's tactics like this that have led to Wales having the largest increase in rents anywhere in the UK, except for London. In some cases, we're hearing of rents doubling and families left bereft.
Now, we hear that private landlords are leaving the sector with claims that the added burden of regulations are making things difficult for them. Ignore those claims. Firstly, regulations are there to protect the well-being of tenants. What we're seeing is property owners cashing in on inflated property prices, and, in some cases, cashing in after taking advantage of Government funds to make their properties more habitable and suitable for tenants, and then selling them for a profit or placing them on Airbnb. So, once again, what we're seeing is public funds being transferred directly into private bank accounts. Surely, you can see that there's something rotten in this system. So, we have a scarcity of available properties, which is adding to the problem and leading to massive increases in rents in some cases.
In Wales, average rents have increased by over 15 per cent year on year. This is far more than inflation, and can't be justified. Two years ago, many private renters were spending over a third of their incomes on rents, and here in Cardiff tenants were spending closer to 40 per cent of their take-home pay on rents. This was two years ago, and, since then, we've seen double-digit rent rises.
Our local authorities are already inundated with people presenting themselves as homeless and requiring temporary accommodation. They don't have the capacity to take on any more, but that's the situation they face this winter. Many millions of pounds are spent on assisting people who find themselves in this position, requiring temporary accommodation or homeless, and council budgets are completely blown. By doing nothing and letting people find themselves homeless, this Government will have to find more money to give councils to cope with the increase in homeless numbers.
Yesterday, the First Minister challenged my colleague Adam Price to find the money to pay for nurse pay increases. Well, the challenge is thrown right back at you. Can you tell us where the money will come from to fund the massive increases in homelessness costs that will come as a consequence of inaction? A rent freeze is a temporary measure. It could be enacted immediately and last for the period of this cost-of-living crisis, which economists expect to be around two years. It could be reviewed on a six-monthly basis. You could then introduce a rent cap immediately afterwards in order to avoid that fear of some landlords massively hiking up their rents.
These are actions common to many other countries. In France, rent rises have been capped at 3.5 per cent for a year as part of a Government package on the cost-of-living crisis. In Denmark, rents have been temporarily decoupled from the consumer price index, and increase capped at 4 per cent over two years. Limitations on rent settings have been imposed in Paris and Lyon, and state-wide rent growth restrictions have been introduced in California since January 2020, and are to remain in force until 2031. In Berlin, rents were frozen for five years, starting in February 2020, and Ireland is looking to introduce a ban on evictions this winter.
The regional parliament in Brussels has developed an innovative scheme where they link rent increases to a property's energy efficiency, so low energy-efficiency houses are not allowed to raise their rents at all, when 30 per cent of houses in Brussels have very poor energy efficiencies, and this will help the cost-of-living crisis and incentivise landlords to improve the energy efficiency of their properties. So, these are some ideas that could be taken forward if you don't accept this proposal in front of us today. These are steps that you could look at here in Wales.
Scotland has introduced a rent freeze and a ban on evictions following a campaign by Mercedes Villalba and her Labour colleagues. The Labour Mayor of London, Sadiq Khan, is calling for a rent freeze. Labour's shadow housing Secretary in England, Lisa Nandy, is looking at giving councils the right to introduce rent freezes in England. So, will Labour in Wales follow their comrades across the UK? The Tories in Westminster, of course, have already introduced a freeze—a freeze on local housing allowance. Local housing allowance has been frozen for two years, yet in those two years rents have increased more than at any other time.
I've referred before to the exceptional work of the Bevan Foundation, who conducted two in-depth studies into local housing allowance, and the fact that in Wales, over the summer period, there were only 60 properties available throughout the whole of Wales at LHA levels. As a Government, you've agreed that the freeze in LHA allowance should be lifted. That's an easy call, because you can blame Westminster, it's their fault, but we can introduce our own freeze here to allow those tenants to live in their own homes by freezing rents. That's a tangible action that we can take to respond to Westminster's callousness. So, a message to our Labour colleagues: be brave, be bold, don't dilly-dally around. The choice is stark: take action and freeze rents, or do nothing and let people freeze this winter.