Propertymark has urged the Welsh Government to take decisive action to reinvigorate the dwindling supply of rental homes in the private rented sector (PRS), warning that failure to do so could exacerbate the housing crisis.

The organization’s plea comes amid a stark decline in the number of landlords operating within Wales, a trend underscored by national statistics revealing a sharp contraction in property investors willing to remain in the market.

Recent figures released by Rent Smart Wales paint a concerning picture: among the nation’s 22 local authorities, a staggering 17 have recorded a drop in the number of landlords between January 2020 and January 2025. The cumulative effect? A net loss of 1,107 landlords over five years—a decline that coincides with the rollout of the Renting Homes (Wales) Act.

In a bid to stem the tide, Propertymark has formally responded to the Senedd Finance Committee’s draft Budget consultation, emphasizing the urgent need for policies that stimulate rental property availability rather than restrict it further. However, rather than implementing measures to bolster the market, the Cabinet Secretary for Finance, Mark Drakeford, recently unveiled a sweeping 1% hike in Land Transaction Tax across all bands for those acquiring additional properties in Wales.

Further complicating matters, the Senedd’s Local Government and Housing Committee launched an inquiry into the state of the PRS, during which the Welsh Government signalled its support for a controversial measure: permitting tenants to withhold their final two months’ rent as compensation in cases of no-fault evictions. Propertymark has actively engaged in this process, providing both written and oral testimony to highlight the unintended consequences of such policies.

Time and again, the professional body has stressed that compounding financial pressures—ranging from escalating tax obligations and surging mortgage rates to mounting repair costs—only serve to drive landlords out of the sector. The knock-on effect? A dwindling housing stock that fuels rental inflation and deepens market instability.

Consequently, Propertymark maintains that prioritizing supply-side incentives is the most effective strategy to curb rent inflation and prevent further distortions within the market.

Tim Thomas, policy and campaigns officer at Propertymark, reinforced this stance, stating: “Propertymark has been supportive of the Welsh Government’s aims in regulating the private rented sector to make it fairer for all.

“However, there must be a balance, otherwise good responsible landlords will exit the market and those that remain will be forced to increase rents to cover their escalating costs.

“The shrinkage of the private rented sector, as proven by this recent Rent Smart Wales data, shows that the Welsh Government must strongly consider the impact future legislation will have on the sector.

“Given these concerning figures from across most Welsh communities, the Welsh Government must follow our call for pro-growth taxation and reduce Land Transaction Tax for landlord investors.”