A new agreement between the Welsh Government with local authorities and landlords has been announced to cap the future increase in social rent. The agreement, announced by Julie James, minister for climate change, also means social tenants can't be evicted for financial hardship during the 2023-24 rent settlement.
The agreement is designed to "support tenants experiencing severe financial hardship as a result of the cost-of-living crisis". It applies to all social landlords, including registered social landlords and local authority landlords.
Under the agreement, it was agreed that: "There will be no evictions due to financial hardship for the term of the rent settlement in 2023-24, where tenants engage with their landlords." Instead, landlords have been asked to give "targeted support" to those experiencing financial hardship.
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One way of giving this support is through the Welsh Government's £6m Homelessness Prevention Fund, given to local authorities to prevent people and families, including social tenants, from becoming homeless. Julie James MS said: "We have worked hard in Wales to prevent people being evicted from their homes and becoming homeless, by changing the law, strengthening rights for tenants and doing all we can to end homelessness.
"Social landlords use the rent they receive to provide support to some of the most vulnerable people in our communities, providing them with housing and crucial support services and ensuring a new supply of social homes for the future. I would like to thank all the organisations which provided evidence to my officials, to help us reach this agreement."
A big part of the agreement is a cap of 6.5% on any increase in social rents between April 2023 and March 2024. This is significantly below the current CPI rate of inflation, which is 9.6%.
The minister added: "This is the maximum any landlord can charge across all of their properties. No landlord is required to charge the maximum and I know all landlords will carefully consider affordability and set rents as appropriate across their housing stock.
"Within the overall settlement landlords may freeze, lower or raise individual rents based on a number of local factors of which affordability is a key consideration. The rate is a maximum not a requirement or a target."
These are the main steps social landlords have agreed to:
- No evictions due to financial hardship for the term of the rent settlement in 2023-24, where tenants engage with their landlords.
- A cap of 6.5% on social rent increases for the 2023-24 settlement.
- Social landlords should give targeted support to those experiencing financial hardship.
- A joint campaign will be launched to encourage tenants to talk to their landlord if they're experiencing financial difficulties.
- Social landlords will "maximise the use of all suitable housing stock, with a focus on helping those in the poorest quality transitional accommodation move into longer term homes that meet their needs."
- Landlords have committed to invest in existing homes to keep them "safe, warm and affordable."
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