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Income should be considered alongside property prices amid any rent cap decision, sector bodies in Wales have argued as they raised concern about unintended consequences with the plans.
The Chartered Institute of Housing (CIH) Cymru has urged the Welsh government to think through the unintended consequences on any rent cap in a way that takes into account regional factors of affordability in its response to a green paper consultation on adequate housing and affordability.
The industry body said it did not “seem equitable” for rent caps, which are intended to make rent more affordable, to be based on property prices.
“It would be more equitable to base rent caps on a determined local income,” CIH Cymru said in a summary of responses to the green paper.
The organisation suggested using the Joseph Rowntree Foundation (JRF) living rent model to calculate rent levels.
The JRF, a social policy research charity, argues that rent is affordable when it takes up no more than 28% of a household’s net income.
The green paper consultation ran from 6 June to 15 September last year and surveyed a range of stakeholders, including local authorities, private landlords and registered social landlords.
It asked for views on setting up rent controls in the private rental market to make them more affordable for residents on local incomes.
The Back the Bill coalition – which is made up of CIH Cymru, Tai Pawb and Shelter Cymru - aims to enshrine the right to adequate housing in law, which covers issues such as affordability and security of tenure.
“We believe that legislation to incorporate the right to adequate housing into Welsh law is the starting point that provides the paradigm shift in the way we view housing and the investment and prominence it is given in the wider public policy debate in Wales,” CIH Cymru said.
Tai Pawb said it sees the right to adequate housing and rent controls as “two separate policy issues”, with the former a “systematic, long-term and joined-up approach to resolve the housing crisis” and the latter “a more targeted (and limited) policy intervention”.
Some respondents expressed concern over whether extra resources and funding would be available to ensure housing adequacy.
The responses also flagged the possibility that landlords might leave the private rented sector, causing problems for housing supply.
Julie James, cabinet secretary for housing, local government and planning, said in a local government and housing committee meeting on Monday 24 April that the Welsh government plans to release a white paper this summer to consult on how to control deposit amounts and rental increases.
The senior Welsh minister admitted recently that the economic uncertainty and global unrest over the past few years is putting the Welsh government’s 20,000-home target at risk.
Ms James told delegates at the CIH Cymru’s annual Tai conference that the government is “hanging on to our 20,000 target by the skin of our teeth”.
She said: “I’m determined to hang on to it. We need far more than 20,000 homes. I honestly thought when we set that target that I’d be saying at this point in time, well we’ve done that, we’re moving ahead.”
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