Local Government and Housing Committee

Thank you, Chair. Bore da, pawb. Thank you for inviting us along this morning. I think that's a 'yes' and 'no' answer, I'm afraid. You're probably looking for a more definitive answer than that, but I think if we look at what the Government has been doing in terms of legislation and regulations recently, it certainly does get what the private rented sector needs to be, certainly in the short to medium term. So, we're looking at Rent Smart Wales around standards, fitness for habitation, in terms of the contracts, better deals for tenants, et cetera. So, it does have a strategy or a vision in that sense, but, in a sense, that's a response to the context in which we come to this meeting today and the inquiry that you're looking at—what the PRS is for in the longer term. It's almost what the Government has been doing as a response to that context—this massive tenure shift that we've had in the last two decades. So, just some figures for you: in 1991, 21 per cent of the housing stock in Wales was social housing, and 8 per cent was PRS. So, that's moved significantly since then, to 2021, where we have 16.5 per cent in the social housing sector, and 17 per cent now in the PRS. That is a huge seismic shift that informs what we're talking about, effectively, because there's now more reliance on the private rented sector to discharge homelessness duties and find solutions of affordable and social rent.

So, does the Welsh Government have a strategy, longer term, for the PRS in that context? Arguably not. Our argument would be that that should be part of a wider housing strategy, and we certainly haven't seen one of those since the first decade of this century. So, what role does the PRS have in that wider strategy and the provision of a safe, sustainable and affordable home for everyone in Wales? We would argue the starting point for that, as campaign partners with Tai Pawb and Shelter Cymru, would be the incorporation of a right to adequate housing, and what role the PRS has to play in that, and the committee's well aware of our thoughts on the right to adequate housing.

Would you want to say anything more about the role that the private rented sector, in your view, should have in Wales?

Ultimately, the PRS is less robust in response to the market. Landlords are either businessmen, running letting agencies, et cetera, or they’re people who’ve invested in assets. So, they’re going to make decisions that are responsive to the market, and the market has been very volatile in recent years. I’m not going to criticise individuals or businesses for making those decisions, but the social purpose of providing an affordable, safe place for home, I would argue, is much better served by the social housing sector, which is more robust and less responsive to the marketplace, because of social rent. So, if that’s the social purpose, is the marketplace best placed to give us what we need in terms of the supply of affordable homes for everyone? It has a role, obviously, but what do we think it’s for? Is it to provide social and affordable housing? Like I say, the response that the Government is implementing at the moment is because we don’t have enough social housing supply, so we need the private rented sector to plug the gap. But is that the ideal position we want to be in? Arguably not.

What role would you see for the private rented sector ideally, then, Matt, in Wales? How would you characterise it?

Our view would be you need to shift the balance back in favour of social housing. That's the fundamental, core problem with the housing system in Wales and across the UK—there simply isn't enough social and affordable housing to deal with demand. So, we need to shift that balance back.

So, when we look at that shift that you mentioned with the statistics that you stated, Matt, you'd like to see that trend reversed.

Yes, and this is what an overarching, strategic vision needs to address. What is the sweet spot of the ratio? I chat to colleagues in the PRS about this. This isn't about demonising the PRS. There are some really good private landlords who get the social purpose of what they do, but they have to make commercial decisions. Commercial decisions don't necessarily lend themselves to providing the level of supply of affordable social housing that we need, and they're more beholden to welfare decisions at Westminster. The local housing allowance rate is a problem in terms of bringing in more private rented sector to plug that gap. The PRS has a massively important role in the short to medium term to play, because we haven’t got sufficient supply of social housing, but longer term, our view would be the best way to provide that safety net of affordable and social housing is through the social housing sector—housing associations, local authorities.

Okay, Matt, that's great. Would either of our other witnesses like to add anything to what Matt has said on those issues?

I'd probably largely agree with what Matt said. I think the lack of vision for the PRS is fairly clear—there isn't one. And I think that reflects what's happening more widely with housing in Wales, and the fact that there is no wider strategy. I think we can see with policies that have been implemented a lot of positive intent, a lot of what we at Tai Pawb would call progressive approaches to deal with homelessness, housing, standards. The challenge really is, without that vision, they're all coming from different places, so they're not lined up from one strategic base, and it means that we're kind of chasing our tail, so to speak, when we're looking at things like supply, affordability, suitability, accessibility, because we're not starting from one overarching vision.

I see. Serena, did you want to add anything, or are you content with what we've heard?

I'd agree with the vast majority of what's been said, so I don't think I've got anything to add to that, thank you.

Thank you, Serena. We'll move on to some more detailed questions, rather than the more general ones we've started with. Sam Rowlands.

Thanks, Chair. I want to ask some questions about supply, quality and affordability. But before I do, on this issue of vision, if I may, Chair, is there a risk in us just talking about the private rented sector in isolation, because it's so intrinsically linked to different types of housing? Is that a fundamental issue—that it's not necessarily a vision about the PRS, but it's a vision about homes and housing more broadly? Is that the biggest issue, do you think?

Yes, you've hit the nail on the head there. It's one housing system; it's not the private rented system over here, the social housing system over here, owner-occupier. Every decision made in each of those tenures has an impact on the others. The decision not to invest at a strategic level in social housing supply over the last two, three, four decades means we have a gap in provision of that. Therefore, we rely on another sector—we're relying on the PRS. They are interlinked. And then, you have other decisions, economic decisions, which impact the marketplace, which then have an impact on supply in that tenure, which puts even more pressure on other tenures. So, it's all interlinked. And, yes, the one joined-up strategy of how we need to balance that tenure is key and fundamental to this. We've spoken at previous sessions about what drives that, what drives the vision, or what needs to drive the vision, and, from our perspective, it's that everyone has a safe, affordable and sustainable place to call home. Our view is that we need to legislate for that in order to drive that investment. It may be that, in the short term, we need much more investment into the PRS, in order to meet that vision of everyone having a safe, affordable house, but, long term, our view would be that that investment would be better placed going into social housing, to plug that gap.

Anything further, David, perhaps, from you?

Nothing more to add.

I'll just bring Mabon in at this point, Sam, if that's okay.

Diolch—thanks. You touched there on the LHA. Leading on from what Sam said about the whole sector, thinking about the funding of the sector, is the funding structure currently the best way that it can be, the best funding structure possible—that you have funding from the UK Government going to private landlords here, but the Welsh Government doesn't have any control over that? Do you think there should be more devolution around that?

We're talking about the devolution of welfare, then, aren't we, which is a whole new discussion altogether. The reason why we're relying on LHA rates so much is because we haven't got enough social housing. If we had more social housing, we wouldn't have to discharge so many into the private rented sector. The private rented sector is beholden to market forces, but it's also beholden to the local housing allowance, because that's what it's based on. So, if you're at the thirtieth percentile, or you've frozen that for a number of years, then what's the incentive for the private rented sector to rent to social housing tenants, or tenants being discharged from the local authority list? It all impacts. But if you had more social housing, then that is paid down to the Welsh Government, and social rent is cheaper, so it's cheaper for the public purse overall, isn't it? It needs to balance up. I keep saying the answer is that strategic vision about what does that tenure mix need to be. Because if we reduce our reliance on the private rented sector and discharge our homelessness duties at affordable social rent, then we reduce the cost.

I will go into the area I should be fishing around in, which is around supply and affordability. In much of what's been said so far, the word 'supply' has been mentioned. Are we looking at solutions often that aren't actually looking to address the real issue, which is there's just not enough houses out there? If there was one single thing the Welsh Government could do as an intervention in this area around supply, what do you think would be the most effective Government intervention to help deal with the supply and demand issues in the private rented sector?

Do you want to go? I feel like I'm hogging the—.

No, that's fine. I'll go first. The tenure mix currently, as Matt alluded to, is about 17 per cent in the PRS. So, the private rented sector does currently play a huge part in housing people and supporting people. We know, from our projects in Gwent, Gwent Boost and Open Doors, that, with the right support, landlords can support people in the PRS to access it that perhaps would have struggled previously, whether that's through mental health or other issues. In terms of one intervention, I don't think it's just about one thing. Boosting supply is important, but it's where are the houses, who are they suitable for, are they accessible homes. The Equality and Human Rights Commission has done a report talking about a hidden crisis for disabled people in Wales. So, I think we need to be conscious of that, moving forward, that it's not just a simple answer of increasing supply, because that won't actually resolve the type of houses that we need. I think it's more nuanced than that.

Can I just come back on that point? I absolutely understand that, and I always try to use the phrase 'appropriate housing' rather than 'affordable housing', because affordability is a factor, certainly, but appropriateness of housing is really important, including affordability within that. Do you think sometimes we just use it as an excuse to slow things down in terms of supply? It feels like there are so many loopholes and things that you have to jump through to get LDPs agreed and housing developments agreed and houses being built. I think we expect report after report after report, but perhaps we just need more houses to be built. Am I wrong with that? Am I perhaps getting too frustrated?

No, you're not wrong at all. We need lots more housing of all types and with the right tenure mix. It comes back to your previous question about how interrelated all these tenures are. You can't mess about in one area and not expect repercussions to happen in other areas. In terms of the overarching question you asked, I think the biggest intervention at the moment to increase supply in the PRS, or to maintain supply in the PRS at the level we need, would be certainty over the LHA rate. That's one of the big mechanisms being used across the UK, because there's insufficient supply of social housing, in order to bring PRS homes into use. It's been unfrozen for a year, but we don't know what's going to happen after 2024-25. Maybe we'll hear something later today. That would then encourage more landlords into the PRS, or maintain the PRS, which would then have an impact on the marketplace and would drive down rents for the whole PRS market, which would then make it more affordable for young professionals, for people wanting that in-between accommodation that the PRS is for. I'll come back to that fundamental point: what is the PRS for? What do we want it to be? Is it that wider mix of supply and affordable housing, or is it just about providing the wider mix of housing for young professionals, for other types of people who want to use the private rented sector? You're right, we need to build a heck of a lot more homes, but the vision needs to be, as David was saying, about what types of home we want to build.

I don't know, Serena, if you want to comment on any of those points at all.

Thank you, yes. It's back to—we've rehearsed this topic over and over again—the mix. Due to the balance that has happened over the last few decades, the pressure that that has caused, we need an absolutely massive investment in social housing in order to be able to support the rebalance. I appreciate the conversation here is focusing on the private rented sector, but as an interrelated system it's an incredibly important part of the puzzle. We see people accommodated in the private rented sector who would absolutely qualify for social housing but are unable to access it because of scarcity, and that is a considerable problem that does need to be addressed. I think it is that interconnected nature. It's interesting that the question is coming up about who is the private rented sector for. I think that is an important question to consider and to reflect on, but it's the same question that's being asked in the social housing sector too as scarcity drives further and further into that system. So, that just demonstrates, I think, just how interrelated these areas are.

Clearly, the Government would probably sit here and say that the reason why they're struggling with the volumes in the social rent sector is constraints around the public purse and challenges there. But in terms of the build-to-rent sector, you've got institutional investors out there who have fairly large pots, and those pots have probably grown significantly with interest rates at the moment. So, I just wonder whether you think there's anything that the Welsh Government could or should be doing to encourage those institutional investors to spend that money here in Wales and invest in a build-to-rent market to increase that supply. Is there anything you think Welsh Government should be doing more of? Matt.

Again, if it's their vision that they want to grow the private rented sector and they see it as a central part of the vision to provide a safe, affordable home for everyone, then they need to think about levers that can draw in that investment—

Do you think that they just don't see it as a valuable part of the mix?

I don't know. They're certainly addressing issues in the private rented sector to try and bring more homes into use, particularly through the lease scheme, which we may come on to. I think from what you hear from the Minister and the Government, their vision is more of increasing the supply of social housing to meet that affordable housing demand, but you have to get that mix right. What is that ratio? I'd pay a lot of money to the person who can come up with the sweet spot that gives us that ratio, and then we know exactly what we need to do.

But what is the incentive for a private investor to invest in the private rented sector? The market is more in student accommodation, it's more in Airbnb, holiday lets et cetera, et cetera. What's the incentive for them to build rented accommodation in Cardiff, Swansea or Wrexham that has a mix of affordable and market rent properties? It's such a volatile market. The sector is so beholden to the market. We've got lots of private rented landlords pulling out of the market because of the high interest rates et cetera. So, what's the return on investment? I'm not sure many investors will see it as a safe bet at the moment in terms of that wider spread of the private rented sector. There are specific elements of value, but that's not going to give us what we need in terms of supply, I don't think.

Okay. David, do you want to say anything further? No, fine, okay. Serena, anything from your side? No, okay. Lovely. And then the last one from me, and I do have some thoughts on the comments you've made there, Matt, but I don't want to go down a rabbit hole. It's fine, I'm conscious of time. So, my final question on this point, then, is about what you think Welsh Government's priorities might be for reducing disrepair and environmental hazards in private rented housing. Is there anything you think they should be focusing on to make those spaces better for those tenants? David.

If you don't mind, I'll go. Our Gwent project identified a few things in conversations with tenants' groups. A couple of things that were particularly relevant here were greater investment in the environmental health teams so that enforcement—. We can have the regulation in place, but, actually, if there are not the teams and staff to go in from local authorities to inspect properties, make recommendations and hold the minority of bad landlords to account, then the legislation isn't going to make the difference. Similarly, there was support for investment in tenant groups, so that tenants could have a form of advocacy, support and voice in terms of some of these matters, in holding bad practice to account, really.

Okay, thank you. Serena, I think you wanted to comment as well.

Yes, thank you. I was going to make that point regarding local authority environmental health teams. It's really important that they have sufficient resources to be able to manage their duties and obligations, and we know that they are very stretched at the moment. There is also an issue around access to justice for people. There's an issue around that functioning public law system that needs some attention, I think, in terms of helping individuals respond to any challenges that they're experiencing.

I'd also say that we are fairly new into fitness for human habitation legislation; we are still in very early days around that environment. We will expect to see case law set around how that's being implemented, obviously both in the social housing sector and in the private rented sector in Wales, because of the unified obligations and responsibility. So, there is something about staying close to how that is actually working in practice and what we're discovering as a result of that, which I think it will be important to pay attention to.

Before Matt perhaps jumps in—I don't know if you do—I'm just wondering how much these points are challenges for local authorities, especially with their environmental health teams, because if they do find an issue in a property, and somebody needs to not be in there, there's nowhere else for them to go. It goes back to that supply issue, where it's very difficult to find somewhere else for them to go. But if that supply was much higher, then there's much more incentive, I guess, for the landlord to ensure that their properties are in a good shape. I don't know how much of that is true; I suspect it may be. But if I was running a council and I was trying to find more properties, it's nearly impossible at the moment, isn't it? But, Matt, do you want to comment? Sorry, Serena.

I was just going to—. On that point, a meeting I was at recently had an environmental health team representative in there, where they had identified category 1 hazards in some properties that residents were in—families—but those families would rather have stayed in those category 1 hazard properties then move into bed-and-breakfast accommodation where they'd have arguably even more difficult conditions, and certainly constraints around cooking and visitors et cetera. So, you're absolutely right, that is a considerable problem.

All right. Do you want to say anything, Matt?

Well, only to make the wider point: enforcement focuses minds, doesn't it? The legislation and the regulations are in place through Renting Homes (Wales) Act 2016 in terms of the hazards, but colleagues have made the point about the lack of resource within local authorities to enforce that. That's been an issue with Rent Smart Wales all along, really, and wider enforcement across the housing piece in terms of enforcing 106 agreements, for example. So, it's local authority capacity, but, yes, you're right, Sam, if it focuses minds for landlords to be better, then that has to be a good thing.

Thank you, Chair.

Okay. Thanks, Sam. Jayne.

Diolch, Cadeirydd. Good morning, first of all, both of you. Matthew, in the written evidence, you recommended that Welsh Government should make landlord insurance a mandatory requirement and that this would remove the need for tenants to pay for the deposit. Perhaps you could expand a little bit on that.

Yes. So, apart from other aspects like the LHA rate et cetera, the biggest barrier to accessing the private rented sector for many potential tenants in that space where they're looking for affordable housing specifically is (a) deposits, so often a month's deposit in advance, plus a month's rent, which is pretty much unaffordable for many people, particularly in the more urban conurbations, where rents are higher; but also the routine credit checks, which households will have poor credit ratings et cetera.

So, the mandatory insurance—average cost around £170 per annum from our investigations into it—would remove the requirement for that deposit, and less so for credit checks. So, it would provide a safety net for both tenants and the landlords, because they could claim for disrepair et cetera off that insurance. So, it opens up more supply or more access for tenants who may not be quite at a level where they can access social housing, but still need that affordable housing piece through the private rented sector.

Brilliant, that's really helpful. Thank you for that. I just wonder if any of you have a view on rent regulation, and if so, what model would you support?

Did you want to come in first, Serena?

Thank you. I have spent a bit of time looking through information regarding regulating rent. Obviously, in the social housing sector, we have an environment within which that is regulated. I don't know if the committee are aware of the 2022 research from the UK Collaborative Centre for Housing Evidence, but if not, I can forward a link to that. But that makes it pretty clear that rent controls can have negative, positive or neutral effects, and it does depend on your modelling assumptions. So, I'm not here to offer you a particular solution to that, or which one I think could be the right one, but very clearly, it's an incredibly complicated area that requires a lot of careful consideration—that's my view.

If you could forward us that link, Serena, I'm sure that would be welcome, thank you. [Interruption.] Joel—yes. I'll just bring Joel in—

Yes, absolutely.

Sorry.

No, no, that's fine.

Thank you, Chair, and thanks ever so much for coming this morning. I just wanted to have a quick question about the mandatory landlord insurance. Wouldn't that have a counter-effect in the sense of pushing more landlords out of the market, then, if they've got to do the mandatory insurance? Wouldn't that have an impact on insurance premiums? If it was mandatory, then, surely, those premiums would go up. And likewise, if it was for, say, social housing or affordable housing, insurance companies then would charge higher premiums than, say, a privately rented—.

Yes, it could well do. There are always unintended consequences to doing good and right things, I would say. Now, could the Welsh Government get involved in that space? Possibly. We talked about underwriting investment into the private rented sector investment et cetera—could the Government do something to support the sector on that or support the insurance industry on that? I'm not sure what that would look like, but it could be investigated.

But the driving force behind our thinking on that is that we haven't got sufficient supply. We've got 11,000 people living in bed-and-breakfast accommodation, because they can't access the PRS because of many things. So, that is specifically focused on a specific element or a specific barrier to accessing the PRS. But, yes, it needs further thought and investigation, you're right, but it's a solution to solve a specific problem at a specific time.

Okay, Joel. Jayne.

I'm fine, thank you, Chair, but I don't know if you wanted to come back on my second question.

Yes, in terms of rent control, which is effectively what we're talking about, the first point I'd make is that we already have rent control—it's called social rent. The problem is that we don't have sufficient supply of social housing, so, therefore, we're reliant on the market and the private rented sector market to plug that gap. The evidence, as Serena was saying, suggests that the unintended consequence is to push more private landlords out of the market—. Scotland, which has had rent controls in for the last year or so, has seen amongst the highest rent in the private rented sector or the highest rent increases that we've seen. We've done some work in the last year with colleagues in Northern Ireland and between 40 per cent to 60 per cent of landlords there were saying that they would exit the market if rent controls were brought in. So, I think that's probably the last thing we need to encourage at this stage, given the supply issues that we're having.

That said, there can be arguments made for intervention at, what I'd call, a hyperlocal level, so where there are specific—you know, not your wide and regional rent markets, but your hyperlocal, where there are specific problems about, for example, key workers having problems renting at the salaries they're looking at. So, there could be an argument for short-term intervention there. But if there were any intervention, I think our view would be that it has to be linked to that relationship between income and affordability, so that the lowest 25 percentile of income related to the affordability of rent. Because you could set a cap at 30 per cent and someone may be paying 20 per cent, but does that 80 per cent cover their other costs of living, if their income is too low? So, if you're going to do it, you need to look at it in that context rather than just looking at the lowest percentile of rent and affordability.

I suppose there are just a couple of things that I'd add to that. One is that there is a lack of understanding, really, in terms of the equalities impact of rent control. A lot of that depends on the system or method of use, but what would the impact be on families, for instance, that want to stay in a property for longer, whereas rent control would allow a higher turnover of tenancies to allow prices to go up? Accessible housing also is an issue—we already have a lack of accessible housing. In terms of community gentrification of areas, that can have an impact as well.

I think that the bit that I took from the research that Serena mentioned—the CaCHE report—is that with rent control on its own, we don't really know what's going to happen because there are so many different methods—it's really hard to understand the unintended consequences. But, actually, if you look at affordability measures—alongside things looking at supply, suitability, a raft of things to get that—then that's more likely to have an impact. And we at Tai Pawb, and probably Matt would as well, around the right to adequate housing—introducing something like that, which would provide a holistic starting point for talking about these things, would be the way to go, really.

Diolch, Cadeirydd.

Okay Jayne, thank you very much. We will move on, then, to Mabon ap Gwynfor. Mabon.

Thank you, Chair. I'm going to contribute in Welsh. Can we just check that it's working? Everyone happy?

Can I just go back to one point before I come to my initial points? Matt, I think, talked about Rent Smart Wales. Can we have a feeling from the three of you on whether you think Rent Smart Wales is working?

Does anyone else want to—? I'm happy to come in. Again, 'yes and no', I'm afraid. Funnily enough, I was doing some work for a presentation I'm giving later about professionalism. So, obviously, we're the home of professional standards for the housing sector across the UK, very focused on the professionalism agenda at the moment, given all of the negative stories about damp and mould et cetera, and the role that professional standards play in that. And there's a lot of evidence from a similar scheme in Scotland, the LETWELL scheme, which is the regulation of letting agents, about mandatory continuing professional development having an impact on outcomes and tenants' experience. So, the evidence is there.

In terms of Rent Smart Wales, I've not seen any data or evidence collected to give us that causal link between better outcomes for tenants and better standards specifically, but, ultimately, as the home of professional standards, we believe in good CPD and good professional development, and Rent Smart Wales mandates that from letting agents and landlords who are registering. So, the assumption has to be that it is. I still wait to see evidence collected on that. But, if it's similar to what's happening in Scotland, then it will have an impact on outcomes.

I suppose more specifically—I'll talk specifically; there's an instance here—there's the opportunity for Rent Smart Wales to perhaps do more. So, as an example, the recent White Paper on homelessness reform talked about opportunities for different sectors to link in with the housing options—so, the PRS linking with housing options, for instance, when a tenancy is coming to an end in the PRS. There's not really been anything concrete in that. The conversations that we've had with private landlords is that they would welcome opportunities to use things like Rent Smart Wales, that, if a tenancy was coming to an end, they could refer into Rent Smart Wales and then that would kick off a chain reaction, if you like, so that housing options could get in touch with a tenant at an early stage. The landlords we spoke to were very much in support of that and felt that, actually, it could be done quite simply through the systems that they already have in place. So, we probably would argue that it could perhaps do more and be encouraged to do more.

Thank you. Would Serena like to come in?

Diolch. Thank you. I suppose just to bring—. Obviously, as a social landlord, we don't have very much contact with Rent Smart Wales, for obvious reasons. But I suppose just to bring in—. And I don't disagree with the points made by colleagues earlier, but, in terms of an example that might point to whether or not Rent Smart Wales is able to fulfil its complete obligations or complete expectations, there was a situation in one of the local authorities that we work in where a private landlord was planning to dispose of around 140 properties. We worked collaboratively with multiple housing associations to understand what we could do in order to mitigate any increased risk of homelessness to many of those households; many of those properties were occupied, although a significant number weren't. And it was really clear that that landlord was compliant with all the obligations within Rent Smart Wales, but, those properties, many of them had significant category 1 hazards and were in hazardous conditions that required a huge amount of investment to bring them up to social housing standards. So, there is a disconnect between—. An obligation had been achieved in terms of the certification required to be licensed under Rent Smart Wales, but the actual delivery on the ground, certainly in this portfolio, didn't match the expectations. So, I thought that was useful just to bring as an example.

That's useful. That brings me on to the next question. I know that, in Gwynedd, the local authority is starting funding to buy in housing from the private sector back into the public sector. Do you think that that is a way forward, especially when a private landlord wants to get rid of their portfolio or property, that it's an idea for a housing association or a local authority to buy that house back into the public sector, protecting the rights of the tenant at the same time. Is that a way forward? And how much of that do you think is happening in Wales? Serena.

Shall I respond? Is that okay?

Please. Yes.

So, the—. We're really grateful to Welsh Government for the transitional accommodation capital programme, because that's been really instrumental in supporting exactly that activity: purchasing, acquiring, properties that were privately rented, bringing them back into—bringing them into the social housing sector, or, in many cases, bringing them back. Because we're often trying to acquire properties that were sold through right to buy, right to acquire legislation or rights previously. So, where we have an existing footprint in a locality, purchasing back those properties that have previously been sold and privately rented makes absolute sense.

So, that transitional accommodation capital programme—or TACP, as the acronym goes—has been exceptional for that. We've also bought properties from private developers—so, brand-new properties—and then made those available. I think there is a question that we need to ask ourselves when we're faced with those questions, which is whether we are—. Because there are some similarities to mortgage rescue in this context, but whether or not we are—. We need to be sure that we're rescuing the tenant or the contract holder rather than considering rescuing landlords, and I think, sometimes, there is a bit of tension between those two spaces, which needs to be considered.

But, in the first year of TACP funding, 936 homes were bought by the social housing sector in Wales, and that is a considerable number, and we need more certainty with that funding stream, and we certainly need more certainty than just a one-year budget cycle. It's a real problem across the whole of the development environment, actually, both in acquiring and new build developing, that the life-cycle of those is much longer than a budget-setting cycle. And I know that's a kind of systemic issue, but it is a real challenge that we face, because we purchase multiple properties and then we have to get them up to the required standard. And we are absolutely right that there are many private landlords who are very good landlords operating, providing brilliant quality properties and services, but there are also those that aren't. And one example from that example that I mentioned earlier is that just two properties that were purchased out of the ones that were being disposed of by that large private landlord cost £150,000 to bring up to Welsh housing quality standard and fitness for human habitation obligations, so the grant level also needs to be at a level that not only supports the acquisition, but also the refurbishment.

So, it's an excellent addition to the landscape and we've got some great examples of where we have used both TACP funding for—. Particularly where there's an individual who's got—. We had one example where there was an individual who had a disabled son, adult disabled son, living in the house. They'd had multiple adaptations in the property, they'd lived there 19 years. The landlord, this was their sole property, they were selling for their retirement and, you know, we were able to—. They would have become homeless. The complexity of the needs of the son meant that there was no suitable alternative appropriate, and it was brilliant that we could progress that, keep that household in situ.

It does raise a challenge about allocation processes. So, we're kind of reverse assessing, really, in terms of people who are living in those properties, but, absolutely, this is a great addition to the landscape.

Diolch.

Nothing on that. I was going to make a quick point about Rent Smart Wales and what we were talking about there, but we may come on to it later, about data and about the lack of data around Rent Smart Wales. But we may come on to it, particularly—

We will come on to it later.

Yes. Okay. But nothing to add to what—. I think Serena's covered it extensively there, so—.

Thank you. And then, there are some housing associations and local authorities that have private rented sector portfolios, especially in England. What are your thoughts on this? Do you think that's a way forward?

I don't know whether Serena wants to come in on that, as a landlord.

I apologise—my translation service didn't come through for that point. I apologise.

I'll repeat. Some housing associations and local authorities have PRS portfolios also, in England especially. Is that a way forward for us? Do you have any ideas on this?

It's still not coming through, is it?

Shall I come in?

Do you want to come in, while we perhaps try and address the problem?

Yes. Again, it's all about balance, isn't it, and what social landlords are for. Many social landlords, housing associations, have got into the private rented sector as a way of creating more finance to cross-subsidise other areas of the service, but I suppose then there are questions for landlords to answer about, okay, how much does that private rented element draw services—repair services et cetera—away from the social housing stock, which is the core purpose, and related to the private rented sector, and then what levels are they going to set rent at in terms of the marketplace, generating the additional income without the additional cost or too much cost, and at what level the rent would be affordable in terms of their core social purpose, which is to provide affordable and social housing.

Okay.

Can I ask a question on that, Chair?

Carolyn.

So, the transfer housing associations—and I believe that some of them now are looking at building to raise funds, and they're saying they're using those for social housing—do they do much homeless prevention? Do they use officers for that? Because I know that social landlords do use their housing support grant to ensure that people stay in their homes longer as well, and they can help them as well. So, they do, I think, more besides just being a social landlord, whereas, those that have become transfer landlords, do they behave differently?

Do stock transfer landlords behave differently to traditional—?

Yes.

No, they all have the same requirements in terms of the regulatory agenda. So, all housing associations are governed by the same regulatory standards.

Okay, so they help with the homelessness support as well. Okay.

Yes. All housing associations work in that space in terms of providing support, yes.

Right, thank you. Okay. Thanks for clarifying that. Thank you, Chair.

Mabon, do you want to put the question to Serena again, because I think the translation should be working now?

We'll see if it works now. I'll just say. I was just mentioning that there are some housing associations and local authorities, particularly in England, who have gone into the PRS and they have PRS portfolios—I was wondering what your views were on that as one way ahead. Is that something that we should look at?

Diolch. Thank you. That did come through. Yes, there are some social landlords who have got market rent properties, and we have got—. In Coastal we have some intermediate rent properties, and we might come on to that point later in terms of the UK Parliament's forthcoming renters reform legislation. But I would say—. For us, as an organisation, we have decided not to pursue that as an option, and partly that is to do with that the amount of complexity you have across your portfolio can generate real difficulties, and I think we're a bit of a stick-to-the-knitting kind of housing association who want to focus on our primary objective. We do have some diversification in terms of a bit of commercial portfolio for retail, leisure et cetera, but not in that market rented sector. And I think it would be helpful if—. There are a number of housing associations that do have those portfolios. I think they work when they are more at scale. I think it's difficult to do in a small way. But I think it would useful to try and get some evidence from one of those associations that are running a portfolio like that, to understand the opportunities and the challenges.

Okay. Mabon, are you content?

I'm content.

Okay, Carolyn. Carolyn Thomas.

I'll just ask you some questions on discrimination. So, Tai Pawb's written evidence recommended that Welsh Government should do more to assist refugees to access the private rented sector.

Yes, sure, no problem. So, I suppose, just to clarify to begin with, by refugees, you mean people who've been granted leave to remain, to stay in the UK by the Home Office/

Refugees as opposed to asylum seekers.

Yes, just for clarity purposes. So, we've undertaken a number of pieces of research over the last year or so for different projects, really, and this is also backed up by research in England—that the majority of refugees actually experience homelessness once they've had their status granted. And there's a number of reasons for that and barriers that are stopping them access the PRS. I suppose the first one is the short notice period of up to 28 days maximum of trying to find accommodation from the accommodation that they're in currently. Inability to work means that refugees can't build up savings or a credit history. A lot of landlords in the PRS and agents require credit checks, employment checks, or references from employers. And, again, those act as barriers for people to be able to access the PRS. And then there's a lack of deposit or guarantor system in place, which is a real barrier to people getting onto that housing ladder.

For us, obviously, the 28 days is important, and I know there are changes happening within that, but the impact of this leads to expensive stays in temporary accommodation. It delays people accessing opportunities to rebuild their lives. So, we would see opportunities to look at guarantor schemes or deposit schemes from the Welsh Government as really positive in this area.

Okay. Anybody else want to comment on that? No. Okay. Do you think that there's also some discrimination for people who have got pets that want to access the private rented sector as well? People need pets for support as well. Serena's nodding; would you like to come in on this?

Thank you. Yes, I was interested, particularly, to read the submissions from the pets organisations, and I think it's a point that was made in one of the previous sessions as well regarding people with disabilities and their relationship with pets. Pets are an incredibly important part of a family and households, and I know that this has been an issue in the social housing sector as well as the private rented sector. And it is contentious. It does raise some challenges, particularly where you've got blocks of flats. There are some challenges around it. But, ultimately, I think it's really important that residents are able to have pets in their homes, and that supports them living a good life according to their expectations and ambitions. So, I think it's a really important part of the changes.

How do you think this could be overcome, then—by, maybe, insurance or policies such as that, because to get a deposit can be really hard, can't it, a larger deposit?

Yes, I noticed in the submissions that, actually, the fear of the impact compared to the actual impact isn't always in the same place. So, I think there is considerable anxiety that there will be more disrepair issues. And, to be fair, when we do have difficult housing conditions issues at properties, they are sometimes with pets, and issues around being able to manage pets. But that shouldn't be—. The fact that it happens on a small number of occasions shouldn't dictate an entire policy landscape, and I think, sometimes, the fear is worse than the reality.

Okay. Thank you, Serena. And, just moving on, what's your view on the Welsh Government legislative consent memorandum on the Renters (Reform) Bill, which will create new criminal offences for discrimination in relation to children or benefit status?

Anything that brings around change in this area we would welcome. We've all seen the adverts on Facebook community groups, or whatever, and it's disappointing every time to see them. I think a survey by Shelter Cymru found that 37 per cent of landlords in Wales say they do not, or prefer not, to let to tenants on benefits. And I think it was something like the equivalent of 75,000 tenants across Wales that have reported discrimination when they tried to find their current homes. So, this is a significant issue.

I suppose a couple of other things were that it comes back to the enforcement side of things as well. So, it's not just about having the legislation in place; it's being able to make a difference with it. And that also comes back to some of the conversations we've had earlier around supply. Our work in Gwent has identified, speaking to some young people, that they just feel the PRS is out of their reach unless they earn more than £26,000 a year. To me, that's a significant amount of money. So, if you've already got a system where people feel that if you don't earn £26,000, you're not going to be able to access the PRS, then unless you look at improving the supply and enhancing the supply, you're not going to have a difference, because there's always going to be a survival-of-the-fittest approach.

Would you like to come in?

No, nothing to add to what David said.

Okay, thank you. Serena, did you want to come in on that? Is there anything—?

Yes, thank you—just a couple of points. One is that, as I mentioned earlier, we do have an intermediate rent product—that's not the greatest word—the Welsh Housing Partnership, and that does require people to be in employment. It's intended to hit that group of people who don't qualify for social housing, but they don't have sufficient income or savings to be able to purchase their own home. So, there are some products that are specifically designed, and so we'd need to consider those in the context of this Bill that's coming through, obviously, particularly where it applies criminal offences as a result.

The other issue I just wanted to reference is children. I know that, when we look at that, we're looking at children under 18, but there is an issue with adult children living in properties, particularly where properties are age restricted. That might be extra-care, retirement housing, or sheltered housing. So, there is a real challenge for us, sometimes—sometimes around succession, but also around the mix of the scheme. So, we'd need to understand if the legislation is specific in terms of under 18 or whether it captures adult children in that context as well.

Thank you, Serena. Thank you, Chair.

Okay, thank you, Carolyn. Joel James.

Thank you, Chair. I know Matthew briefly touched on data collection, so that was what I was going to ask, really. I know, in the written submissions, you mentioned the paucity and the lack of information, of data collection there, in terms of Rent Smart Wales in particular. I just wanted to get your views in terms of what the Welsh Government should be doing to prioritise that data collection—so, basically that, really, I suppose, and what you think, then, in terms of Rent Smart Wales. Because I know one of the issues there is, in terms of landlords, they register to become a landlord, but then if they leave five minutes later, they don't deregister until five years or whatever’s up, when they have to reregister. I just wanted your views on that.

Whenever we come before this committee, we always get to data at the end, don't we, or the lack of it, or the opaque nature of the data that we have. There are three key elements from our perspective, I think, in terms of what we're talking about today. So, firstly—Serena alluded to it—we have the regulations and legislation in place, but still we're finding landlords who are meeting Rent Smart Wales requirements, but the conditions weren't great. So, that's why we've backed the National Residential Landlords Association's call for a more granular house condition survey, à la what's happening in England. So, we've been calling for that for a number of years. I think that would shift the dial on understanding the standards of our private rented sector stock better.

Back to Rent Smart Wales, the huge problem there, I think, is, like you say, they register every five years. So, at any given point, it doesn't tell us about what the churn is, in terms of landlords leaving the sector. So, the latest figures, officially, show the PRS sector has increased. But, actually, that's not what our anecdotal evidence tells us. Again, there's the example Serena gave, and I can give examples of big, multi-portfolio landlords pulling out en masse in certain towns and cities across Wales. But that's not indicated in the data, because it's only set every five years, so that doesn't tell us what's happening.

The other one is the WHO12 data, which is the number of people discharged into the private rented sector as part of the homelessness duty, which was collected before the pandemic but hasn't been reinstated, I don't think. So, again, that gives us a more strategic understanding of how reliant we are on the private rented sector to fill that homelessness discharge perspective into social and affordable rent. But, yes, it's the data, isn't it?

Yes. Okey dokey. David.

We would support the need for some kind of regular survey of household conditions in the PRS. I suppose what that would need to be linked to is the purpose of the PRS as well—so, what data are we collecting and why. There's no point in just collecting data for data's sake; it's actually having a vision, having an understanding, and then collecting data that supports policy action as a result of that. And that comes on to the other point, which is about data analysis. So, there's no point in just collecting the data unless we are then going to analyse it and do something with it that can proactively make a difference. I think the example I gave earlier on on homelessness and referrals probably fits that well, where there's data that kind of exists and there are opportunities to link it together, and that's where we could make a difference—not just collecting the data, but doing something with it.

That's it, really, from me, Chair.

Okay, Joel. Thanks for that. I'll just bring Mabon in briefly, and Sam.

I'll ask this in English. The vast majority of private landlords in Wales are small—they own one, maybe two properties—but there's a large percentage of rented properties in Wales that are owned by large landlords, and they own dozens if not a few hundred. We've seen recently some venture capitalists come in to buy up property as investment opportunities. So, on that top end of the landlord spectrum, those that own a lot of properties, do you think that's healthy? Is that a good thing, because we're going to see more people come in and buying, potentially, especially in the larger urban areas, property as investment opportunities?

Well, anecdotally, that's shifting. So, lots of single-home 'accidental' landlords, or whatever we want to call them, are dispensing of their properties, and often they're dispensing of their properties to the larger letting agent firms et cetera. Given the vagaries of the market at the moment, the pressures on the market—and this comes back to the point Sam was making about whether we need to encourage investment capital—the biggest returns for private rent are students, holiday lets, Airbnbs, et cetera. So, when those properties are going to these letting agencies, they're going to look at how they max out the return on their portfolios, and they're more focused on business decisions. And that's not a criticism of them; they've got businesses to run. But, it's not providing us the mix of tenure we need because many of those single-home landlords would be letting out their home that they've inherited, or whatever, to a long-term tenant over a long period. That's less likely to happen with the bigger letting agencies because they're running businesses, in the end, and, again, that's not a criticism of what they're doing. So, how do we do it? We need those properties to come into the market, but we need to find a way of making sure there's a balance with it. And this is where I come back to that overarching strategic point about, 'Do we need the PRS to be supplying that type of property, or do we think that's more in the social housing or affordable housing sector?'

Within that, what do you think is the role of houses in multiple occupation, then? Are we seeing that playing its role fully, or is that just a way for some investors to get more money off the back of people who can't pay, maybe, full rent?

Well, that's becoming increasingly impossible, to discharge homelessness duties into HMOs because the HMO allowance, or the shared housing allowance and local housing allowance don't cover hardly any properties. So, that's more about the student sector and the young professional sector—the sort of thing that I did when I was at the start of my career journey, sharing with other professionals. It comes back to that question: what is it for? What's the sector for within that wider strategic vision of what housing supply we need to provide in order to meet everyone's requirement to have a safe, sustainable, affordable home?

Okay. Sam.

Thanks, Chair. Just reflecting on the hour-long evidence that we've received, I guess, for some of you, you've probably sat in front of this committee, or similar committees, or had similar sessions in the past, and I just wonder whether, collectively, as Members of the Senedd and Government as well, we've just got so used to the issues that it's a shoulder-shrugging attitude, sometimes, to dealing with them. I just wonder is there a risk that we're not grasping the nettle on dealing with the housing issues that we're seeing, because we've heard an hour of what sounds like a really tough picture out there, which I guess has got more difficult over recent years. I don't know, just any thoughts on—. I'm opening it up a bit here and being a bit philosophical. But at what point do the frustration and the difficulties spill over into action, and at what point do you as organisations push harder on some of this? It's all very polite, it's all very nice, it's informative information, but in terms of actions off the back of this, what are your thoughts on my ramble?

It's the fundamental question, isn't it, Sam, I think? Let's just have a quick look back at history. Addison, in the early part of the twentieth century, under the Attlee Government, Macmillan under the last Churchill Government, the number of homes that they were building at the time was because good housing and a sustainable home was a national mission. It was the central national mission, or one of the central national missions of each of those Governments, and that's what delivered it at the end of the day. That's what delivered the priority, that's what delivered the investment, and that's what created the space in which to build and invest in good housing—not all of it great, of course, but at the level, pace and scale we needed it at the time. We're in that time again. We're in 1919, we're in 1947, we have a deep, systemic and structural housing emergency—11,000 people in temporary accommodation, 3,000 of those kids, 139,000 people on social housing waiting lists in Wales, 39,000 of those kids. This can't go on. Yesterday, we had a report that 55 kids in temporary accommodation died in England in the last four years. That's not acceptable, and that's because we have a systemic and structural housing emergency.

The discussion we're having today is indicative. We're talking about the PRS, but it's not just about the PRS. The issues in the PRS are a result and a symptom of the whole housing system. There are lots of systemic decisions that have been taken over the last several decades and structural problems, economic issues that are stopping building, et cetera, that we need to address, but unless Governments make it a foundation mission—and we would argue the starting point for that is a right, enshrined in law, to force Government to do that—then we'll just come back in a couple of months' time and discuss what we do with the social housing sector, or what we do with the owner-occupied sector.

And the last point: growth is the narrative of all our politicians at the moment. There's no better way of driving economic growth than house building as a national mission. It worked in 1919, it worked in 1947, and it worked in Churchill's Government. This isn't a political thing, it's just common sense.

Thanks very much. That is all we have time for. You will be sent a transcript to check for factual accuracy, but thank you all very much, Matt, David and Serena, for joining committee and giving evidence this morning. Diolch yn fawr. Committee will break briefly until 10:35.