How Will the New Labour Government Impact the Welsh Rental Market?

On 4th July 2024, the UK saw a change of government to the Labour Party. This means we will see changes in policy and legislation across multiple sectors, not least within the Welsh rental market.

The Welsh Assembly Government’s Labour-led Senedd will continue to regulate the rental market, focusing on improving standards and the rights of contract holders (formerly referred to as tenants), as we saw with the Renting Homes Wales Act in 2022.

Now that Westminster also has a Labour majority, we expect the UK government’s policies to align more closely with those already enacted in Wales. Topline, the Renting Homes Wales Act saw more protections granted to contract holders and extensive requirements have now been put upon landlords of properties subject to occupation contracts with penalties for failing to fulfil them. Much more security is now given to contract holders in the form of longer periods before notice can be served by landlords, and if the extensive requirements are not fulfilled, notices often become automatically invalid with lengthy periods of time having to be waited until a further one can be served.

These changes to Welsh legislation increase security of tenure for contract holders, but in doing so, landlords face much tighter regulations.

Potentially, this may lead to many landlords choosing to sell their properties instead of learning how to navigate these changes from the Renting Homes Wales Act and, we can predict, from the UK government. This could reduce the already scarce supply of properties available to rent in Wales, causing further tensions within the housing market.

A balanced approach to housing policy will be key from the Labour government, to ensure that there is ample housing supply and that rents are affordable.

Landlords willing to embrace changes will no doubt find plenty of opportunity for expansion and experience fewer void periods - and indeed, they may be able to increase their rents at quality properties due to the competitive market. New or existing landlords could expect rising income levels as rent prices continue to increase, and demand is set to remain high. As long as landlords are prepared to follow strict regulations and comply with rent controls, this is an attractive time to invest in property in Wales.

Overall, it will be key for landlords to stay compliant, informed and proactive as policies develop.

For advice and guidance on the rental market in Wales, contact Ben Davies benjamin.davies@jcpsolicitors.co.uk