Major housing reforms unveiled in Wales

Byron Britton examines the key proposals in the Welsh Government's Housing (Wales) Bill.

On 18 November 2013, the Welsh Government published its draft Housing (Wales) Bill, proposing significant reforms to a number of specific housing issues. A summary of the Welsh Government’s proposals is set out below:

Homelessness

The Bill includes a new strengthened duty on local authorities to take reasonable steps to prevent and relieve homelessness, with an emphasis on prevention; enabling local authorities to discharge their main homelessness duty through suitable accommodation in the private rented housing sector; and taking steps towards ending family homelessness.

Private rented sector

The Bill will introduce a mandatory licensing scheme with accreditation for all private rented sector landlords and letting and management agents in Wales. The intention is to improve standards of management, property standards and to support an increased awareness of the respective rights and responsibilities of tenants, landlords and letting and management agents.
The proposed legislation provides:

• private landlords and agents must register and become licensed with the local authority in the area where the property is located;
• individual local authorities will be responsible for any necessary enforcement action against non-compliance;
• the scheme will be based on the existing “Landlord Accreditation Wales” scheme;
• the scheme will establish a comprehensive, on-line database of all private landlords and agents that operate in the sector;
• the process of becoming licensed will commence after registration;
• the scheme will operate a training and development provision, or landlords can choose to attend approved training courses delivered by other bodies.

Gypsies & Travellers

The Housing (Wales) Bill will also include a provision to place a duty on local authorities to provide sites for Gypsies and Travellers where a need has been identified. Where the need for sites has been identified, but not met, the proposed duty would enable Welsh Ministers to compel the authorities to provide suitable and sufficient sites. However, sites would still be required to obtain planning permission in the normal way. 

Welsh quality housing standard

The Bill will enable consideration to be given to setting appropriate standards for new homes to be developed by local authorities.
Under new self-financing arrangements, stock retaining local authorities will have greater freedom to invest in their housing stock and may wish to consider the potential to build new homes to meet local housing needs.
It is intended that the legislation will ensure that all tenants will receive an acceptable standard of accommodation regardless of whether they rent their homes from a local authority or a housing association. Local authorities will have to ensure that all their existing properties meet the Welsh Housing Quality Standard by 2020.

Housing rents and service charges

Following agreement with HM Treasury in June 2013, the Housing (Wales) Bill will abolish the Housing Revenue Account Subsidy (HRAS) system and will bring an end to the transfer of housing revenues from Wales to the UK Government.
This means that the current guideline rent system will also end. Accordingly, local authorities will have no system to set rents and will have no powers to influence the level of rents for retained authorities.

As part of the agreement, the stock retaining local authorities will need to ‘buy themselves out’ of the subsidy system.
The Bill will enable Welsh Ministers to take forward the agreement and consult with the stock-retaining local authorities on a proposed ‘buy-out’ value. They will be able to specify the procedures and timescales that authorities will need to follow to exit the system.
It is intended that savings will arise from exiting the system which local authorities can use to invest in their housing stock.

This is intended to ensure that local authorities will have more to spend on bringing their homes up to the Wales Housing Quality Standard.
As part of the agreement, HM Treasury require a housing-related borrowing limit to be set for each of the affected authorities. This will restrict future housing related borrowing, but will allow local authorities to continue to invest in their housing stock in line with their current housing business plan commitments.  


The Bill will also set standards to be met by stock-holding local authorities for rents and service charges. This will provide the legislative framework for the new rent policy and ensure that rents and service charges are clearly and separately identified. This is intended to create greater transparency in payments made by tenants to the stock-retaining local authorities. The Bill also proposes minor amendments to the existing legislation relating to reasonable rents for local authorities and to standards for housing associations. The latter will ensure there is a consistent approach to setting standards for local authorities and housing associations. This means that the standard can set out the rules that need to be followed, to ensure that guidance on the standards can be revised and will require Welsh Ministers to consult on changes to the guidance.

Council tax

The Bill will provide local authorities with a discretionary power to charge up to 150% of the standard rate of Council Tax on homes which have been empty for more than twelve months. Although it would not be possible to “ring-fence” the additional revenue, it is expected that it would be directed into addressing problems caused by a lack of affordable housing in the relevant local authority’s area.
Some opposition AMs have suggested that amendments are likely to be proposed to increase Council Tax on second homes but this is currently not in the draft Bill.

Cooperative housing

The legislation will also facilitate the further development of co-operative housing.
The intended effect of the legislation is to strengthen the ability of fully mutual housing co-operatives to contribute to providing additional homes by allowing them to develop affordable housing schemes and
by allowing fully mutual housing co-operatives to grant assured tenancies. It will also allow them to use standard tenancy agreements and address a known difficulty (the ‘Mexfield trap’) with tenancy agreements between the Cooperative and its members.

It will be interesting to watch the debate on these proposals over the forthcoming months, and if and when enacted, will see a further divergence between the housing law applicable in England, and that of Wales.

Byron Britton is a specialist housing barrister at Temple Court Chambers, Cardiff.