Letting agents have called out Welsh Government plans to enable tenants facing eviction to keep their final two months’ rent as ‘compensation’.

The comments by trade association Propertymark come after housing secretary Jayne Bryant (main image) clarified that her Government would support the option of allowing renters to retain the last two months of their rent as compensation when facing a no-fault eviction.

'No-fault’ eviction refers in Wales to a Section 173 possession notice which enables landlords to evict tenants six months after a periodic standard contract (as tenancies are known in Wales) has begun.

But Propertymark says it is ‘concerned’ by the comments, which were made during a recent Senedd inquiry into the private rented sector.

It says the measure is troubling because the recently-enacted Renting Homes (Wales) Act 2016 already gives tenants in most circumstances six months’ protection from eviction.

Financial burdens

Propertymark says introducing more financial burdens for landlords is “counterproductive when they are already experiencing excessive costs from tax hikes, climbing mortgage rates, and repair costs, as it risks hindering the supply of rental homes, and will, therefore, cause rents to increase”.

It points out that supply is the most efficient method to stabilise rents and stop further market distortions.

Tim Thomas, Policy Officer at Propertymark, adds: “The Welsh Government has listened to our concerns over the unintended consequences of implementing rent controls in Wales by currently discounting them as part of their White Paper.

“However, they must now continue to listen to our advice over the likely impact of awarding two months’ compensation to tenants in receipt of a possession notice will have on the sector. We are continuing to engage with the Cabinet Secretary on this issue.”

The Welsh Government says it will listen to stakeholder feedback about its plans including the ‘rent return’ proposal and next steps will be in April this year.