Just 24 rental properties have been secured in ten months under the Welsh Government’s private sector leasing scheme.

The scheme, officially announced by housing minister Julie James this week, aims to tackle homelessness in Wales by paying landlords to rent to people who are either homeless or are at risk of being homeless, and has been trialled over the course of this year.

A Freedom of Information request by The National found that, to date, twenty-three landlords across seven local authorities have enrolled onto the scheme, receiving a total of at least £32,515 in grants, zero-interest loans and repairs – on top of guaranteed monthly rent.

One council – Newport – was unable to recruit any landlords, while Carmarthenshire Council recruited just one.

Poverty thinktank The Bevan Foundation told The National that this new data confirmed its concerns about the policy’s “viability” as a solution to the housing crisis.

 

THE SCHEME

Announced on Tuesday, the Welsh Government’s new PRS Leasing Scheme forms part of its action plan on homelessness. A fund of £30million has been set aside to deliver the scheme.

The policy works by incentivising landlords to rent their properties out at a discounted rate, and trials of the policy have been running at several local authorities across Wales since around February this year.

Landlords on the scheme are eligible for grants of up to £2,000 to refurbish their properties, as well as zero-interest loans of up to £8,000.

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The council takes on the day-to-day management of the property, including repairs, and the landlord receives guaranteed monthly rent – whether someone is living at the property or not.

In exchange, the rent price is reduced to 90 percent of the Local Housing Allowance rate.

During this summer's Senedd Election, Welsh Labour described the scheme in their manifesto as follows: "We will develop a national scheme restricting rent to local housing allowance levels for families and young people who are priced out of the private rental market and those who are homeless or who are at risk of homelessnes." 

LHA rates determine the level of financial support a claimant will receive through Housing Benefit or the housing element of Universal Credit, and they’re set by council officers based on rent costs for the cheapest 30% of properties within a given area.

According to the Welsh Government, properties managed under its new Leasing Scheme will be used to house people who are either already homeless or at risk of becoming so. The properties will be leased for between three to five years, at which point they will return to the landlord’s possession.

The initial trial local authorities were Cardiff, Carmarthen, Conwy and Denbighshire – with Rhondda Cynon Taff, Newport and Ceredigion added in around March “in response to Covid-19”.

The trial’s performance is outlined below.

Conwy and Denbighshire, which are running their leasing scheme trial jointly, secured the highest number of properties, at fifteen.

The majority are two-bed properties, rented out at £444 per month.

The councils advised they had received one complaint from a tenant housed under the scheme, “about storage heaters, problems with water pressure and lack of hot water at the time of moving in.”

Newport City Council, meanwhile, was unable to secure a single property under the leasing scheme.

“Newport City Council signed up to run a Pathfinder leasing scheme under the Welsh Government's PRS initiative, but was unable to secure any properties within the rent ceiling for the scheme, in the timeframe,” the council said.

Earlier this year, poverty thinktank The Bevan Foundation published research suggesting that 95 percent of properties advertised for rent in Wales were above LHA rates, with one council officer describing properties affordable to benefit claimants as “the toilet end of the market”.

The Welsh Government hopes that the PRS Leasing Scheme will address these failings, but The Bevan Foundation expresses reservations – though it says it “welcomes” progress that has been made.

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Of the data uncovered by The National, a spokesperson for the thinktank said: “This data confirms the concerns expressed in our report on the Local Housing Allowance published in September.

“We found that when there is a large gap between the LHA rates and the market rents, landlords are hesitant to engage with any scheme that involves them receiving LHA rates, as they are able to earn substantially more on the open market.

“Just last week, the UK Government announced that they would be continuing the freeze on LHA rates for the second year in a row.

“Given this news, we therefore have concerns about how many landlords will engage with this scheme, and whether it will be extensive enough to be a viable solution.

“In the longer-term, it is our view that the £30 million that the Welsh Government have allocated for this scheme would be better spent on increasing the stock of social housing, which offers greater security, better quality and cheaper rents than the private rental sector."

(Image source: Garry Knight)Homeless households in Wales have steadily increased since 2016 (Source: Welsh Government)

Homelessness charity Shelter Cymru told The National that it was “too early” to determine whether or not the Leasing Scheme will be a success, adding: “We welcome that the scheme offers tenants affordable rents and longer-term security, however this scheme only addresses a small part of our wider housing emergency in Wales, which affects one in three people across the nation.

“The delivery of the Welsh Government’s key commitment of 20,000 new social homes will be a vital piece of the puzzle, as will turning many of the nearly 30,000 empty properties in Wales into good homes that people can build their lives in.”

READ MORE: The time has come to finally address Wales' housing crisis

Homelessness is a notoriously difficult problem to measure, given that official data often misses “hidden homelessness” – cases in which a person is sleeping on a friend or relative’s sofa, for example, or staying at a hostel, and may not necessarily realise they are eligible for support.

Available data, however, suggests that at least 9,993 people in Wales had been threatened with homelessness between 2019-2020, while just under 12,400 households had been assessed as homeless during the same year.

More than 2,000 households had been living in temporary accommodation (e.g. hostels, or bed & breakfasts), 849 of which were families with children.

The estimated number of rough sleepers across Wales – people forced to sleep on the street – was 405, an increase of around 17 percent from the previous year.

The Welsh Government was approached for comment.

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