National Leasing Scheme Wales evaluation: summary

In January 2022, the previous Welsh Government launched Leasing Scheme Wales (LSW or ‘the scheme’), an innovative approach to increasing the housing stock available to local authorities to facilitate discharging their housing duties (particularly Part 2 Housing (Wales) Act 2014 duties (UK legislation)) to help people who are experiencing homelessness (Section 73) or are at risk of homelessness (Section 66). Local authorities source eligible Private Rented Sector (PRS) properties by entering into a lease agreement with the property owner for a period of between 5 and 20 years, in exchange for a guaranteed monthly rental income at the rate of the Local Housing Allowance (LHA). This makes the local authority the landlord of the property for the agreed period of time, enabling them to provide long-term, affordable (LHA-equivalent) and good-quality accommodation. Incentives are offered to property owners for joining the scheme, including grants of up to £5,000 for properties to be brought up to the required standard, meet other desirable standards based on local demand or increase their energy efficiency through the Optimised RetroFit Programme (ORP), as well as grants up to £25,000 for properties previously classed as empty.

Alma Economics was commissioned by the previous Welsh Government in January 2023 to undertake a 3-year evaluation of the scheme. The aim of the evaluation was to understand how LSW has been operating as a national scheme, including identifying what is working well and what challenges there have been to implementation, its expected impacts on stakeholders (Local authorities, property owners, and tenants), and its contribution to the government’s overarching housing goals. The evaluation has informed the set of recommendations put forward to the Welsh Government regarding the scheme’s operation in the future, as outlined below. Emerging findings from the evaluation were published in an interim report in 2024, which included a first set of recommendations based on qualitative and quantitative research, as well as analysis of scheme monitoring data across the 13 Local Authorities that were already implementing the scheme between January 2023 and February 2024.

The final phase of the evaluation, covering the period March 2024 to February 2026, was adapted to account for the onboarding of new local authorities onto the scheme, as well as the scheme’s expansion in those local authorities already administering it, capturing both process and impact elements at different LSW implementation stages across Wales.

Main phases of the methodology were:

• interviews with scheme-participating local authorities, taking place between November 2024 and November 2025, including 12 local authorities that had already been interviewed in the interim phase (‘established’ local authorities) and 6 local authorities that either had not yet joined the scheme or were still too early in the onboarding process at the interim phase (‘recently onboarded’ local authorities)
• scheme-monitoring data collection from all local authorities that had properties onboarded onto the scheme in March and September 2024, and March and September 2025
• interviews with 12 scheme-participating property owners and property owners very interested in the scheme, taking place between November 2024 and October 2025
• a short online feedback form open between May 2025 and October 2025 that was completed by 20 property owners who had dropped out during the scheme onboarding process
• an online survey administered with the support of local authorities’ Housing Officers to 65 scheme-participating tenants between October 2024 and October 2025, with one tenant further attending an online interview.

Reducing accommodation waiting lists in Wales

The scheme has been highly successful in expanding across Wales. Since the first 15 local authorities that joined the scheme in 2022, gradually, the remaining local authorities have also been onboarded, with the final 2 local authorities onboarding in 2026. 

This has allowed for the gradual upscaling of the total number, but also the different types of properties onboarded throughout the country. As of September 2025, there were 444 properties on board, the majority being 2-beds and 3-beds, with the scheme also gradually increasing its stock of 1-beds and 4 or more bedroom properties, albeit at a lower rate. Properties onboarded onto the scheme are advertised internally in each local authority, and Housing Support Officers nominate tenants from their waiting lists who fall under their homelessness duty. This has resulted in increasingly moving tenants out of temporary accommodation who, through the tenancy support offered as part of the scheme, are provided with the skills required to be able to live independently, thus effectively reducing accommodation waiting lists. Despite long waiting lists in temporary accommodation, local authorities felt the scheme was meeting this purpose.

Engaging property owners and re-utilising empty properties

The main scheme disadvantage for property owners undoubtedly remains the rent being set at the LHA rate. Scheme-participating property owners, owners interested in the scheme, owners who dropped out during the onboarding process, as well as local authorities, have acknowledged that higher rent rates can be secured privately. However, features of the scheme such as the grants offered, the property management taken care of by the local authority, and the housing of vulnerable tenants have been able to offset the LHA rent rate mainly for accidental landlords (e.g., those who have inherited properties), owners of empty homes, as well as those motivated by the positive social impact of the scheme.

Empty properties in particular have played a decisive role in increasing the housing stock under the scheme; of the 444 properties in the scheme in September 2025, 307 were previously classed as empty. Considering that, according to Census 2021 data, there were 102,875 vacant dwellings in Wales (Office for National Statistics, 2024), there is expected to be a long-term positive impact on the housing sector more broadly as empty properties are brought back into use after being upgraded. For example, recent research (Portman, 2024) highlights the game-changing impact retrofitted empty homes can have on the increasing shortage of safe and affordable housing in the UK and internationally.

Enhancing the wellbeing and quality of life of tenants

Tenant satisfaction with the properties they access under the scheme is also clear. This is across the full tenancy process, beginning with tenants being carefully matched to properties based on their needs, given access to tailored types of support, as well as being well-guided through the scheme onboarding, all of which are acknowledged as having a positive impact on their wellbeing and quality of life.

Tenants who completed the survey expressed high levels of satisfaction with their housing conditions under LSW and the extent to which the property meets their housing needs. Tenants also acknowledged several advantages to renting through LSW, with rent affordability, tenancy support, and longer lease lengths particularly standing out. Results from the tenants’ survey also indicate that there is particular satisfaction with the support received on managing their tenancy, support with repairs and adjustments, and support in applying for benefits. Some further types of support that tenants would like to have access to included advice or support in looking at accommodation options for the future once the current tenancy contract ends, furniture packs, and support with finding or keeping employment.

On the other hand, monitoring data and findings from interviews with local authorities both show that the take-up of LSW and ORP grants increased as more properties joined the scheme, with the majority of properties undergoing upgrades before onboarding. The scheme therefore effectively contributes to the improvement of PRS properties across Wales, which positively affects the quality of life of all PRS tenants, and not just those housed under the scheme.

Promoting peer support among local authorities

Critical to the success of LSW has been the coordination and communications established by the Welsh Government. This has further enabled local authorities to advise and learn from each other’s challenges and best practice in implementing the scheme, an approach well-suited to having local authorities onboarded at different times and local roll-outs taking place at different paces. Local authorities in particular praised the dedicated workshops facilitated by the Welsh Government and a few called for these to be more frequent.

Introduce a local authorities ‘buddy scheme’

Recently onboarded local authorities emphasised that while the scheme is more established now, it is still new to them so more frequent meetings to discuss challenges and best practice would be helpful. Local authorities are already informally providing support to each other, but this can be further embedded through a ‘buddy scheme’ where established local authorities are paired with recently onboarded local authorities for more hands-on support and guidance.

Target the profile of property owners the scheme is mostly appealing to

LSW has proved to be most attractive to empty property owners, accidental landlords, property owners less reliant on their rental income, and those in other ways motivated by the aims of the scheme. Scheme promotion should continue to target the distinctive characteristics of the property owners’ profile it is appealing to, while listening carefully to this group’s feedback for improvements.

Simplify lease contracts to reduce demands on accidental landlords

A recommendation resulting directly from the research findings is to simplify lease contracts, as a number of scheme-participating property owners who participated in the research felt these contracts are currently “excessive” with too much legal jargon and often had to pay solicitors to review them. This reflects the fact that accidental landlords will have less experience with the legal side of the leasing arrangements and should therefore have extra support and guidance on this.

Provide bespoke incentives to resource additional or desirable types of properties

To attract other profiles of property owners (e.g., professional property owners), additional incentives will be required. The current grants on offer do not provide incentive for properties with little to no work required. Equally, the rent set at LHA rate does not attract property owners who rely on rental income. In a similar way, additional incentives could be used to attract property types that are most in demand, such as one-bed properties and properties meeting accessibility requirements.

Review the scheme guidance for local authorities

Local authorities requested further adjustments to several aspects of the guidance provided to them on administering the scheme, including: i) what the ORP funding covers, especially regarding boilers, ii) what Energy Performance Certificate (EPC) ratings are acceptable on the scheme, particularly whether EPC ratings below C are unacceptable, or if acceptable only when working towards a higher EPC rating, iii) eligibility of Houses in Multiple Occupation (HMOs) on the scheme, and iv) further details on the process for when leases come to an end, such as renewing the leases under LSW or moving tenants into new schemes.

Re-evaluate the impact of the scheme on tenants after the 1% PRS milestone has been reached

Considering the gradual roll-out of the scheme across the country and the fact that tenants participating in this research did not come from all scheme-participating local authorities, it is advised to run another tenant survey after all local authorities have reached the scheme milestone of securing 1% of PRS accommodation per local authority. This will give access to a wider pool of tenants and therefore experiences of being housed under the scheme across all local authorities, while having met the 1% target will also mean that local authorities will be less preoccupied with the initial phases of set-up and local implementation that can be resource intensive. Tenant participation is known to be challenging, particularly in social housing and similar settings (Preece, 2019). This evaluation has shown that the hands-on support of the local authorities has been instrumental in achieving the engagement of tenants, therefore any future engagement efforts should consider local authorities’ capacity and timings to coordinate this.

Report author: Alma Economics

Views expressed in this report are those of the researchers and not necessarily those of the Welsh Government.

For further information please contact:

Housing Research Team (KAS)
Welsh Government
Cathays Park
Cardiff
CF10 3NQ

Email: HousingResearchTeam@gov.wales 

Social research number: 79/2026
Digital ISBN: 978-1-80853-119-4