The BSA (Building Societies Association) has warned the Welsh Government that their plans to regulate all private landlords could mean increased rents for tenants. They want the Government to carry out a full cost benefit analysis of the policy outlined in a White Paper in May before they become law.
Housing Minister Huw Lewis announced proposals that mean anyone wanting to let properties privately will have to sign a register before being allowed to have tenants move in. All private landlords will be expected to sign a mandatory register and they will also have to pass a fit and proper person test that will include having landlord insurance. The new scheme will apply to all landlords and agents, regardless of whether they let one property or they have a large portfolio of properties. The BSA are warning that there is a danger that the changes will see rents increasing as private landlords pass on the extra costs associated with registration, to their tenants.
BSA Mortgage Policy Advisor, Colette Best, said “The Homes for Wales White Paper suggests that the private rented sector should be regulated, to include a register for landlords and an accreditation scheme for those managing rented properties. The expectation is that the scheme will be self-financing with a modest fee for registration. Some of the areas of cost which will be involved are: setting up policies, decision making panels and separate appeals panels, plus a system to monitor which landlords and agents have registered. Similarly, there will be a need to decide how to handle those who choose not to register and the accreditation scheme will need to be set-up and managed, and codes of conduct enforced.”
If fees turn out to be very high it may see some landlords deciding to move out of the private sector altogether, with the potential knock-on of reducing supply. This would be bad news for tenants as the private rental sector has seen a surge in demand as people have struggled to get on the property ladder. The Welsh Government has acknowledged the comments from the Building Societies Association and say they will consider their input, along with observations made by other interested parties.