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Explains the scheme and what it means for tenants and property owners.

First published:
24 March 2021
Last updated:

What is the Private Rented Sector (PRS) leasing scheme?

The PRS leasing scheme is intended to increase access to, and the affordability of, renting privately in Wales. This scheme will see properties leased by a local authority to help prevent and relieve homelessness. We have developed a Welsh Government-backed offer for property owners interested in the scheme. Additionally, tenants housed will be provided with a high-level of support to help maintain their tenancy. The Scheme is intended to benefit tenants, property owners and local authorities.

Why we are introducing the scheme

Preventing and resolving homelessness in all its forms is a priority for us. We are looking at additional, innovative approaches to increasing the stock of housing, and a model such as this could make a significant and important difference for Wales.

For those struggling financially, the disparity between Local Housing Allowance rates and market rent limits access to the PRS. Working collaboratively with external stakeholders we have developed a model that we believe will give local authorities a significant extra resource in helping to prevent and relieve homelessness. Finding an offer that also works for landlords has been an important part of developing this model.

Objectives of the scheme

Improved access to affordable and good quality homes in the PRS for those in receipt of benefits, including universal credit, through the removal or reduction of risks which property owners may perceive as arising during a tenancy.

  • longer term security of accommodation for tenants at risk of homelessness by providing accommodation for a period of up to five years
     
  • tailored and regular support to help tenants maintain their tenancy, during the scheme and in the future. It is envisaged that this will include support and advice on how to live successfully and independently in settled accommodation, including around money management training.
     
  • reducing the stigma and cases of discrimination. Successful participation in the Scheme will demonstrate that with the right support there need be no greater risk associated with renting properties to those on low income or receiving a benefit contribution towards their housing costs
     
  • improved standard of those properties in the PRS which are part of the Scheme. This will be achieved through the provision of financial assistance to bring properties which are to be let under the proposed Scheme up to an agreed minimum standard

The offer for tenants

Tenants who live in these properties will be assured, subject to their observation of the terms of their contract, of up to five years of accommodation in the private rented sector at local housing allowance rates.Tenants will have access to good quality, affordable private sector housing with tenancy support akin to that provided by social housing landlords.

 

The offer for property owners who lease their property to the local authority

In summary, the offer to property owners under the pathfinder scheme is:

  • rental payments for the length of the lease at the relevant Local Housing Allowance rate, less a percentage equivalent of a management fee in the PRS of 10%
  • where necessary, an offer of up to £2000, as a grant, to bring properties up to an agreed standard. If this amount is insufficient, the property owner will be eligible for a 0% interest loan of up to £8000 in addition to the grant
  • repairs of any damage to the property made by tenants, subject to reasonable wear and tear, and the landlord’s liability for structural defects. This would form a term of the lease
  • a guarantee of appropriate support for tenants who need it, throughout the lifetime of the lease

 

Standard of property

The minimum standard of properties accepted onto the pathfinder will be linked to Welsh Housing Quality Standard (WHQS) standards and there will be an element of grant and loan to ensure that any property participating in this pathfinder is of a high standard. The incentives we will provide will also help improve the standards of the private rented sector more generally in Wales.The local authority will be responsible for maintenance of the property for the duration of the lease.

Local Authorities taking part in the scheme

Cardiff, Carmarthen, Conwy and Denbighshire are taking part in the scheme.

Additionally, Ceredigion, Newport and Rhondda Cynon Taf have been added to the pathfinder in response to Covid-19.

Why a pathfinder?

Pathfinders are a means of testing the usefulness and viability of a potential project or scheme, on a small scale. They exist to enable those involved to learn lessons and to develop some best practice. If a pathfinder provides enough evidence that a project or scheme is viable, the lessons learned and best practice is then used to design the larger-scale project or scheme. The goal is for this pathfinder to provide a test base for a scalable model. Lessons learned will help inform the development and design of any potential national scheme in the future. The pathfinder’s model will test the ability to provide significantly more affordable housing, of increased quality, with greater security of accommodation across Wales.