Following the news of the Plaid-Labour cooperation agreement, one policy making the headlines is rent controls. What are they and how can they be applied to the Welsh context?

Rent controls would be a type of price capping or maximum price introduced into the private rental market. It is key to understand the detailed architecture of rent controls when evaluating their likely effectiveness and the arguments for and against.

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For a start, rent controls are said to be helpful in addressing the excess profits of many landlords who have been able to increase average rents as new housing supply available for rent has not kept pace with growing demand. This is particularly true in areas of Wales where there is a lack of rental housing stock. We also know that rising rents are pricing people out of housing where they live and work.

We need to build a Wales where people can work and live anywhere, in their hometown or elsewhere. There is a lot of talk these days about exodus from certain areas due to not being able to afford a house there, but this never accounts for those of us who want to settle in a place, work there and call it our home. That should be possible for anyone.

The National Wales: Concerns over the housing crisis in Wales have been building. Photo: PAConcerns over the housing crisis in Wales have been building. Photo: PA

It is a fact that excessive rents reduce people’s effective disposable incomes and increase demands on the welfare benefit system, which is not a devolved matter. This needs to be accounted for when looking at the housing crisis as it is so much more than just housing; it encompasses wages, health, education, culture and more.

High rents can also make it much harder for younger people to save money for a deposit on a mortgage. There is a lot of pressure on young people here to do what previous generations did but it is simply more expensive now.

Many are sceptical about the impact rent controls would have in helping to ease our housing crisis. There is a fear that capping rents would result in landlords withdrawing investment. In the longer term this would lead to a diminished supply of private sector rented housing which in turn would put extra pressure on demand for social housing and more younger people would have to live at home for longer.

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Furthermore, rent controls might lead to landlords cutting back on maintenance spending of the existing stock of properties and this would reduce the overall quality of rented housing and increase the risks for tenants. This could lead to issues such as housing stock with an increased risk of damp in houses where upkeep budgets have been cut might lead to a heightened risk of asthma for families living in such properties.

NUS Wales have flagged this recently as a problem in Welsh student accommodation managed by private landlords and it is clear this issue cannot be allowed to fester.

It is also important to remember that most landlords are not part of an elite extracting rents from tenants in pursuit of big profits. Many merely see a gap in the market and would rather not leave a house empty or have invested their earnings in housing stock.

We should be looking to crack down on misbehaving landlords with new legislation because even with rent controls, misbehaving landlords will, more often than not, continue to misbehave to the detriment of the tenants and local community.

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Some landlords may demolish homes for rent and replace with new housing available to buy, accelerating gentrification and driving up average property prices in areas where affordability is already a key issue.

The fast expansion of the private rented sector over the last twenty years is evidence of the success of deregulation of rents. The chronic under-supply of rented property is not fundamentally the result of private landlords not investing enough in making more homes available for rent but rather related issues such as the lack of housing stock.

Rent controls is the wrong answer to the right question. The Welsh Government should be building tens of thousands of new social homes for rent, ensuring that people on low incomes or with experience of homelessness can access a safe and secure home.

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They should invest much more in retrofitting housing to be accessible, greener and more energy efficient.

They should be continuing the Rent to Own scheme that has helped people to own their own home for the first time as well as commit to ending homelessness, by adopting a wide range of policies including increasing the Housing Support Grant.

Many others and I are worried about the issue of rent controls as many of the arguments against are just extensions of issues that currently exist in the housing market. Welsh Labour, backed by Plaid Cymru, are showing themselves to be reactionary, reckless and poorly researched on a key policy area.

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