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Rent Smart Wales - What it means for landlords

Posted on 2015-08-17

Halfway through July a story in Wales, which could have a knock-on effect for landlords in England, came to the fore. As part of a scheme launched by the Welsh Government, every landlord in Wales will have to undergo training to prove they are “fit and proper” to hold a license.

Rent Smart Wales, set to be introduced sometime later this year, will require landlords to register their properties and undertake an as yet unspecified form of training to acquire a licence.

Similar schemes have been introduced by certain English local authorities, but the Welsh proposal goes much further. Rather than simply gaining approval from councils for a licence, landlords will be obliged to carry out training before they can register with Rent Smart Wales, which is being rolled out across the country.

Lesley Griffiths, housing minister for Wales, believes the new legislation is absolutely vital to help protect the country's approximately 184,000 renters.

“The new legislation we are introducing will not only improve the situation for tenants – informing them of their rights and responsibilities – it will also help good landlords by improving the sector’s reputation,” she commented.

She added that Rent Smart Wales, when it comes into force at some point in the autumn, will offer a simple way for landlords to register and for them and their letting agents – who will also have to undergo training if they operate in Wales – to be successfully licensed.

Unsurprisingly, not everyone agrees. Douglas Haig, vice-chairman of the Welsh district of the Residential Landlords Association, is of the opinion the scheme – which will be policed by local councils – will do more harm than good. The blanket licensing will not only stretch resources further, Haig believes, but also detract from the task of tackling the minority of landlords who are criminals.

Similar reservations have been heard when English councils have introduced licensing. Since 2004 local councils have been allowed to implement selective licensing schemes, meaning all private landlords in areas with low housing demand or substantial anti-social behaviour have to obtain a license. Places like Newham, Leeds, Bristol, Blackpool, Sunderland, Stoke and Hartlepool have introduced selective licensing in the last decade. Advocates say it drives up standards in the private rented sector (PRS) and flushes out rogue landlords, critics argue that wide-ranging licensing schemes are too often expensive, ineffective and provide no tangible benefits to tenants or the wider community. Instead, they argue schemes should be targeted at specific problems and certain individuals.

As we know, most landlords provide good quality accommodation for their tenants and are always on hand to deal with any problems/answer any queries when needed. It’s essential for the long term health of the PRS that tenants are treated fairly by landlords and that rogue landlords can be caught out.

There have been calls for landlord licensing to be rolled out nationwide, but this seems unlikely to happen for the foreseeable future. There are arguments for and against this type of legislation, but the schemes are often criticised as unfair because they punish good landlords – by making them stump up for a license – while rogue landlords continue to evade the system. Should the actions of a few really punish the many?

There are no immediate plans for England to roll out a scheme like Rent Smart Wales, but the issue of selective landlord licensing will continue to be divisive and continue to provoke debate.

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