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Minister reveals thinking on rents

The rent settlement for social housing in Wales could come with strings attached, according to housing and local government minister Julie James.

In an interview with WHQ, the minister cited value for money for tenants, support for the tenant voice, development of new social homes, action to end evictions, delivery of Housing First and decarbonisation as examples of areas where Welsh Government wants to influence landlord behaviour.

And she said that the announcement on rents that had been expected before the summer recess could now come in two tranches: the formula setting the ceiling for rent increases; and a series of carrots and sticks for landlords in pursuit of a range of other Welsh Government priorities.

On value for money, she said that:

‘We want to have enough flexibility to be able to reward the behaviours we want, and not reward the behaviours we don’t want. I’m not going to name names here but I’m aware that some RSLs that have set the policy at the ceiling and then said it’s the Welsh Government’s fault. Well, we didn’t tell them to put it to the ceiling, we just said that was the most that you could charge in every circumstance. I need to work with people to make sure that they understand that it’s not a target, it’s a ceiling.

‘I’ll be looking to give more flexibility to well-behaving people who do the right thing and less flexibility to people who do not do the right thing. That’s why I’m a bit reluctant to say when I’ll announce it because it’s more complex than just saying “here’s a number”. It’s getting the nuances of that right.’

Asked what other considerations might be, she said:

‘Lots of things, so services for tenants, what the tenant voice looks like, whether you’re building or not, whether you’re using the rental stream to increase the social housing stock, what your build policy is. This is a trade-off, isn’t it? This is the income stream that people use to borrow the money to build the next lot of social housing so in those circumstances you want them to be able to do that. But not all RSLs are building and not all councils are building.’

In terms of timing, she said that she is considering a two-stage announcement.

‘We can say we’ve set a ceiling number but don’t be fooled because there’ll be a whole pile of strings attached to that that we’ll be announcing slightly later on,’ she explained. ‘I understand that people want certainty about it, they want to be able to sort themselves out, but I also want to produce a lot from that system. We haven’t got that many levers so we want to use them to the best advantage.’

Another priority will be the decarbonisation agenda outlined in the independent review published in July and foreshadowed in recommendations by the affordable housing supply review in May on dowry and major repairs allowance.

‘I’m not pushing against the sector here,’ she said. ‘Everybody else wants to do this, too so we’re all on the same page. I’ve not encountered anyone who’s telling me that this isn’t what we should do.’

Read the full interview with Julie James here. To subscribe to WHQ, go here.

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