Welsh Government Urges Landlords to Lease Homes

The Welsh Government pleads with landlords and second homeowners to hand their properties to local councils to stave off a housing crisis.

An official report criticised the Cardiff government for not building enough affordable homes.

Only 6,000 new homes were built in 2022-23 - 3,000 fewer than the recent peak of around 9,000 set 15 years earlier in 2008.

The timescale blurs the number of homes needed in Wales as different forecasts cover different periods, but the average shows that around 7,400 affordable properties are required yearly until 2031.

Ministers have given up building more homes and are seeking to lease properties from landlords and empty homeowners to make up the shortfall.

Guaranteed income - but with a catch

Leasing Scheme Wales offers a guaranteed monthly income and free management service - but only at local housing allowance rates, which are considerably lower than market values.

The reduced income needs to be balanced against what the leasing scheme offers:

• A guaranteed income at local housing allowance rates with no arrears or voids.
• Leases for five to 20 years.
• Complete property management at no charge to the homeowner.
• Property maintenance is included at no cost to owners.
• Grants worth between £5,000 and £20,000 to bring properties up to standard may be available.

However, rental income is still taxable and is far below the market rate.

Lease payments and rents compared

For example, the housing allowance rate for a two-bedroom home in Gwynedd, North Wales, is £115 a week or just under £500 a month.

Rented homes in two of Gwynedd’s largest towns are much higher.

A two-bedroom apartment in the university city of Bangor lets for between £693 and £849 monthly - up to £350 more than the Welsh Government is offering.

Renting a stone-built two-bedroom terrace cottage in Pwllheli has an even wider differential as these homes rent for between £750 and £895 a month.

Empty homes are a wasted resource

Jayne Bryan, the Welsh Cabinet Secretary for Housing and Local Government, argues empty homes are a wasted resource.

“This scheme is a fantastic way of making homes more accessible and affordable. I look forward to seeing how property owners and landlords can be supported through the scheme to deliver safe, long term and affordable homes for tenants,” she said.

Some 20 councils in Wales run the scheme intending to give tenants secure tenure, improve housing standards, and help reduce homelessness.

Ministers hope holiday let and second homeowners will turn over their properties to the scheme to avoid up to 300 per cent council tax surcharges.

Gwynedd has around 5,000 holiday lets and second homes, with owners reportedly required to pay a council tax of £3,000 or more yearly.

Meanwhile, Wrexham rates the UK’s buy-to-let hotspot with an average of 54 inquiries for each home to rent. Average rents are £967 a month, while the housing allowance rate for a two-bed home in the town is £520 a month.