Councillor Joe Carter is the Liberal Democrat housing spokesperson on Cardiff Council. In an exclusive article for the RLA he shares his views on the problems faced by the PRS in Wales and why it is vital that the government works with landlords to solve them.
As the dust settles on the general election and politicians both in Westminster and Cardiff Bay get back to the job of government, there is a lot of uncertainty about the future direction of housing policy.
We still have a housing crisis in my own local authority of Cardiff, in Wales and across the UK, and neither the Prime Minister or the First Minister have seemed willing to take the steps necessary to tackle this crisis, and increase supply.
As a liberal, I’m a great believer in building consensus, bringing different groups together to tackle a problem rather than take a stance on the grounds of ideology or political opportunism, regardless of the facts.
With this in mind I have been really impressed by the work that the RLA has done with Shelter and housing associations through the Homes for Wales campaign. Each group had a distinct interest, but the campaign has been more successful due to your common goals.
During the local elections in Cardiff my party promised that if we took back control of the council, we would bring the private rented sector around the table, rather than exclude them as seems to be the case.
Whilst we lost the election, Labour has since changed its leader and housing cabinet member, so I hope this attitude changes.
The council won’t tackle its housing problems without working with the private rented sector.
Other councils are discharging their homelessness duties into the private rented sector and working with landlords to give them support to enter this market – Cardiff could and should follow.
Listening to the rhetoric coming from Westminster (and to an extent Cardiff Bay) over the last 12-18 months I am worried about the future of the private rented sector in Wales.
We have seen changes and proposed changes to the tax systems have driven up costs for landlords.
This may make sense in a London market that is dominated by foreign investors and large companies, but it risk destabilising a Welsh sector where a significant number of landlords have one or two homes.
If tax changes combined with Rent Smart Wales fees force people to leave the sector and sell up, then that will reduce supply and make it harder for tenants to find somewhere to live.
The news that both the UK and Welsh governments may look to introduce legislation to cap letting agency fees is a concern.
Government has no place fixing prices in a modern economy and it appears to be a distraction from the real problem of lack of supply of homes both to rent and buy.
The experience of banning letting agency fees in Scotland in 2012 simply led to increases in rents (4.2% increase in the first year, whilst rents reduced in England and Wales during the same time) as the costs required to pay for the service the agent provides still need paying.
If the levels are capped then the risk is that the costs are pushed onto to the landlord, who will either push it on to the tenant as rent.
Alternatively they might absorb it themselves, potentially lose money and be forced to leave the market, reduce the housing supply, and potentially push up rents.
There are market solutions to this problem. Student unions have offered a letting agency service in Cardiff and many other UK cities for years.
These services could be expanded and local authority housing departments could set up their own letting agencies if the market is dominated by a small number of big agents who are keeping fees artificially high.
A lack of choice in letting agents is bad for landlords as well as tenants, so responsible intervention in a local letting agency market would be a positive step, but arbitrary price caps store up problems down the line, as they have in every other industry.
The priority for the Welsh Government should be to build the 20,000 new affordable homes that the Homes for Wales campaign estimated we needed by 2021.
Focussing on letting agency fee caps and banning the right to buy are distractions from the real problem that we face of lack of supply. We can only tackle this by working with the private rented sector, rather than working against it.
Councillor Joe Carter
Liberal Democrat housing spokesperson on Cardiff Council