Welcome back to Padarn Property blogs! This week I’ll be diving into Labour’s plan of abolishing fixed-term tenancies and how these will affect the lettings market in Wales.

As Labour's housing reform plans, including the abolition of fixed-term tenancies, take shape, landlords and tenants across Wales are wondering what this could mean for the rental market. Fixed-term agreements, a cornerstone of rental contracts, provide security for landlords and predictability for tenants. But is their removal a step forward or a potential disruptor?

Labour's Proposal: A New Landscape for Tenants

Labour's aim is to create "open-ended" tenancies, ensuring renters can't be forced to leave without valid reasons like rent arrears or property sale. This mirrors Scotland’s model, introduced in 2017, which replaced fixed terms with Private Residential Tenancies (PRTs). The Scottish experience suggests tenant security improves, but landlords often face hurdles regaining possession for legitimate reasons?.

The Welsh Context

In Wales, the Renting Homes (Wales) Act 2022 already simplified tenancy agreements and extended notice periods for no-fault evictions to six months. However, further changes might strain an already tight market. With rental demand high and supply limited, landlords may feel disincentive to invest, especially when paired with rising mortgage rates and stricter regulations?.

Potential Impacts on the Welsh Market:

1. Increased Tenant Security: Removing fixed terms could provide renters with greater stability, addressing concerns about short-term evictions.

2. Landlord Uncertainty: Without fixed terms, landlords may hesitate to rent, fearing difficulty in reclaiming properties for personal use or sale.

3. Market Adjustments: Rental stock may shrink as landlords sell, potentially driving up rents further in a region already grappling with affordability issues.

4. Lessons from Scotland: A Scottish-style system might cause initial disruption.

A Balanced Approach?

For reforms to succeed, Labour must balance tenant protections with landlord incentives to maintain and grow rental stock. Clear processes for repossession and strong communication with stakeholders will be vital.

In Wales, where rental affordability and housing shortages are ongoing challenges, these changes could either provide stability or exacerbate market pressures. Both sides must prepare for a transformed rental landscape, with adaptability and understanding being key.

Would such reforms help or hurt your renting experience in Wales? Let us know your thoughts or get in touch if you have any further questions!

Ben McEvoy