Landlords Face Relocation Tax for No-Fault Evictions

The Welsh Government is looking at making landlords pay a relocation tax as a cash sweetener for tenants forced to leave their private rented homes in a no-fault eviction.

The plan is to let tenants keep two months' rent to compensate for any impact on their well-being and finances arising from an eviction.

As average rents in Wales are £772 a month, according to official data from the Office for National Statistics, landlords would be deprived of more than £1,500 if they chose to repossess a private rented home.

The Senedd’s Local Government and Housing Committee called for this compromise as part of its inquiry into the private rented sector.

The government has agreed to consult about the recommendation and will report back by the end of April.

Eviction dilemma

The report's running theme is no-fault evictions, which the committee says concern thousands of private renters in Wales.

However, the government considers a ban on no-fault evictions violates human rights law unless accompanied by new grounds to allow landlords the right to repossess a rented home to live in or sell.

The government’s dilemma is offering new grounds for eviction would not give tenants any more security to stay in their homes if the landlord wants to repossess than they have under current law.

The report said: “Such a step could help to prevent homelessness and reduce local authority spend on deposits and rent in advance.”

The report also features a strong focus on living conditions. The committee recommends that standards applied to social housing be extended to private rented homes.

Part of this plan would see the introduction of a property MOT as part of the RentSmart landlord licensing regime. Councils would carry out inspections and enforcement.

Pet-friendly homes

The committee also highlighted a lack of pet-friendly homes to rent in Wales.

Research revealed tenants with pets had a limited choice of homes to rent.

The committee says half of renters in Wales are pet owners, but only 7 per cent of homes to rent accept pets.

The report goes on to say that a stumbling block for landlords is the concern that pets will cause damage, which requires substantial cleaning or repair work, and that they may face difficulties recouping costs from tenants.

Tenants in Wales do not have the right to keep a pet in a private rented home without the landlord’s permission. However, if both agree, they insert a clause in the tenancy contract allowing pets.

To ease the problem, the government wants to make pet insurance premiums a permitted payment under the Renting Homes (Fees etc) (Wales) Act 2019.

Another recommendation is framing a system that lets tenants challenge rent rises outside market levels. Although rent controls have been discussed, the worry is rent controls are not a straightforward solution and could lead to unintended consequences, including increases in homelessness.