You may have heard people talking about a "rent freeze". With the cost of living crisis really starting to bite there is pressure on policy makers to do all they can to protect the most vulnerable from rising costs.
One of the ideas put forward is a temporary freeze on rents. As you would imagine, the basis of this policy would mean that rents would not be able to increase during a prearranged timeframe.
Plaid Cymru has been making a lot of noise to try and the the Welsh Government to bring in a rent freeze. But this is quite a complicated issue and to help you get your head around it WalesOnline has put together this breakdown of the situation as it stands.
Does any where in the UK have a rent freeze?
Yes. Or at least Scotland will very soon. Emergency legislation aimed at freezing most rents until the end of March 2023 has been introduced by the Scottish government after pressure from Scottish Labour.
The Cost of Living (Protection of Tenants) (Scotland) Bill is being fast-tracked through the Scottish Parliament's scrutiny process with evidence is being heard on Tuesday by MSPs on the Local Government, Housing and Planning Committee. If it were to go ahead it would give ministers temporary power to cap rents for private and social tenancies, with this cap set at 0%.
There are exceptions to this though. It only applies to existing tenants, if a new property comes on the market it can be priced as high as the owner wishes. There are also exceptions meaning that if a landlord can demonstrate they face increased property costs, mortgage interest payments and some insurance costs, they can increase the rent.
Who wants there to be a rent freeze?
Plaid Cymru is vocally calling for a freeze. Leader of Plaid Cymru Adam Price MS said: “This winter could be the hardest on record, in the face of rising costs and stagnating wages. Plaid Cymru saw this coming. Scottish Government have already acted – incidentally, following a campaign by Labour in Scotland. And yet here in Wales, the Labour Government is still gathering evidence. What further evidence do they need to convince them that preventing homelessness during winter is the right course of action? Welsh Government must use all the tools in its power to shield our most vulnerable over winter – by announcing they will freeze all rents and by banning all evictions now.”
Shelter Cymru has also said that a rent freeze would "have a positive short term impact" and Cardiff People's Assembly has said that "We need a Welsh rent freeze & eviction ban that stays in places until Wales has a comprehensive, national system of rent controls that doesn’t just freeze rents, but brings them down and More council homes."
What are the issues with a rent freeze and why are the Welsh Government not bringing one in?
The Welsh Government has said that there is a fear that the rent freeze could result in properties being withdrawn from the rental market by landlords. When questions about it in the Welsh Parliament Mark Drakefrod said laid out his opposition to the policy.
He said: "The rent freeze in Scotland applies only to existing tenants, so any flat that becomes vacant and is let to a new tenant, there is no rent freeze at all there, nor is there a freeze on costs that landlords can legitimately claim. So, if a landlord can demonstrate that they have to meet increased mortgage rates, they will be able to increase rents for existing tenants. If they can demonstrate that they have extra insurance costs, they will be able to pass those on to existing tenants. If there are rises in the service charges that landlords have to cover, they will be able to pass those on to existing tenants as well. So, let's be clear what this rent freeze actually is. It's a rent freeze that doesn't cover anybody taking up a tenancy, and for existing tenancies there is a whole series of ways in which their rents will be able to go up anyway.
"And then a ban—a ban on evictions. Well, not for tenants with significant rent arrears; not for people who have anti-social behaviour; nor where landlords can demonstrate that they are suffering financial hardship; nor does the ban on evictions prevent a landlord from selling their property. And when I was in Scotland last week, I was being told about two great anxieties about this piece of legislation before it was published. First of all, the stampede to evict existing tenants, so that the changes in the law could be evaded by landlords in that way, and secondly, the risk that there will be a collapse in the amount of property available in the private rented sector, with landlords deciding to sell up rather than to rent, and that then exacerbating changes that are about to happen in the housing market."
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