Restrictions on the rent private landlords can charge tenants are being considered by the Welsh government.
There are no firm plans but officials want to hear from the public and landlords on a range of ideas, including price ceilings and freezes.
It comes as rents continue to rise, with figures showing the highest annual percentage increase since at least 2010.
Landlords warned rent controls would be a “disaster”.
But a tenants’ group argued controls would be the “bare minimum” government could do.
Although controls exist in the social housing sector, there has been no law regulating rent increases on homes in Wales rented from private landlords for decades.
Rent controls are in place in Scotland, where increases for existing tenants are capped at 3%.
The Welsh government is consulting on the issue as part of a wider “green paper” on housing, looking at how ministers can help both landlords and tenants.
Another consultation will take place next year on what a new law might be – part of the Welsh government’s co-operation deal with Plaid Cymru.
There is no firm timetable for any legislation, and the Welsh government has not yet stated an opinion on whether it wants to regulate rents.
The Welsh Conservatives accused Labour and Plaid of proposing “socialist and nationalist red tape”.
Plaid Cymru, which has backed rent controls in the past, said the green paper was a “welcome step” and the free market in housing was “failing our communities”.
Ministers resisted calls for a rent freeze last year, saying they did not want to drive landlords away from the sector.
Increases
Figures from the Office for National Statistics (ONS) said private rental prices increased by 4.8% in the year to April 2023.
It is the highest figure since the ONS started gathering the information in January 2010.
Some areas have seen larger increases than others. Between January 2022 and 2023, Neath Port Talbot saw rents rise by 16%,
The green paper asks for views on a range of models for rent control, including strict price ceilings or rent freezes.
It gives the example of Scotland, which sets a percentage by which rents could increase. This was initially set at zero – freezing prices for existing tenants – and later moved to 3%.
Other proposals include allowing a “reset” at or around market levels between tenancies, such as in Ireland.
There, the first rent that a tenant pays must not be set at more than market rent.
The document calls for evidence from the public and organisations.
‘Affordable and adequate’
Climate Change Minister Julie James said the Welsh government wanted to “better understand the rental market in Wales, in particular what factors influence landlord behaviour in setting rents and taking on tenants and what do tenants consider is an affordable and adequate property”.
She wrote: “I am committed to using all the levers we have to ensure we maintain a viable private rented sector here in Wales… where landlords have confidence to invest in making improvements and tenants have greater certainty that longer term costs of moving into or staying in a rental property will be affordable.”
Acorn, a union for tenants, said “big money is being made off the backs of Wales’ struggling communities”.
In a statement, its Cardiff branch said: “We’re pleased the Welsh government is exploring the idea of rent controls; in this current crisis, with wages declining against inflation, they’re the bare minimum response.”
The National Residential Landlords Association (NRLA) has encouraged its members to take part in the consultation.
Ben Beadle, the NRLA’s chief executive, said: “Rent controls would serve only to decimate the sector further and would be a disaster for tenants, when so many are already struggling to find a place to rent.
“The minister herself diagnosed the issues when she rightly rejected calls for a rent freeze before Christmas. The same reasons apply now.”
Janet Finch Saunders of the Welsh Conservatives said: “More socialist and nationalist red tape and consultations are not going to reduce rents and deliver more affordable housing.”
She accused Welsh Labour and Plaid Cymru of trying to drive “private landlords out of Wales”.
Plaid Cymru’s Mabon ap Gwynfor said the co-operation deal included a commitment for proposals to establish “fair rents in the private rental market and new approaches to making homes affordable for those on local incomes”.
“It’s been clear for decades that the free market is failing our communities when it comes to housing. The system is rigged against the majority of people who cannot afford to compete for what is a limited commodity, land,” he said.
“So, we need to see the government step in to ensure that houses are viewed as an essential for living rather than an investment for financial gain.”
Source – BBC News
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