Welsh Government to trial leasing scheme for private landlords

8 Nov 2019 03:33 PM

The Welsh Government recently announced plans to introduce a pilot ‘lease’ scheme for private landlords, designed to increase housing stock in the country.

The scheme would mean that local authorities in Wales would manage private rented stock themselves on behalf of landlords. In return, landlords would receive a guaranteed rental income at Local Housing Allowance rate for five years. 

The scheme, will be trailed in three local authorities to prove the concept and provide the necessary evidence base for a model to be developed for roll out across Wales.

In this blog, RLA Wales policy officer Tim Thomas takes a closer look at what we know about the proposed pilot scheme.

This week, the Welsh Housing Minister Julie James AM announced the trial of a new scheme aimed at increasing the housing stock available to local authorities in discharging their housing duties, and more particularly their Part 2 Housing (Wales) Act 2014 duties.

The concept will involve managing Private Rented Sector stock on behalf of landlords, who in return would receive a guaranteed rental income at Local Housing Allowance rate for five years. On face value, the scheme appears to be possibly attractive to some landlords, especially those that have entered the sector ‘accidentally.’ 

However, the RLA still has several reservations, notwithstanding the very essence that the scheme takes involvement and control over landlords’ property and would appear to be another attempt to take landlords out the loop altogether.

Nevertheless, proposed benefits of the scheme for landlords include:

• Guaranteed rental payments for up to five years at the relevant Local Housing Allowance rate excluding an agreed percentage for the management fee.  The management of the property would be though a short-term lease provided by the owner to a Welsh Government appointed and approved agent who would then sub-let properties to tenants.
• A grant of up to £2,000 to make properties fit for human habitation and to put right any Category 1 and 2 hazards under the Housing Health and Safety Rating System.
• If there was any serious structural damage that would require repairs in excess of £2,000, a loan of £8,000 could be obtained at a 0% interest rate.
• Excluding usual wear and tear, any damage made by tenants, will be repaired and costs covered by agents.
• Support on offer will be provided for vulnerable tenants such as budgeting, coping on benefits, mental health issues and employment support.

Click here for the full press release