Estate agency trade group Propertymark has appealed to the Welsh government to attract more landlords to the sector by halting its moves to heavily tax property investors.
Research from Rent Smart Wales shows that of the 22 local authorities in Wales, 17 have seen a decrease in the number of landlords during the period between January 2020 to January 2025.
Overall, during the same five-year period, the private rental sector has seen a reduction of 1,107 landlords, which coincided with the enactment of the Renting Homes (Wales) Act.
Tim Thomas, policy and campaigns officer at Propertymark, said: “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.”
In the Draft Budget unveiled in December, Cabinet Secretary for Finance, Mark Drakeford (pictured), announced a 1% increase across all bands for Land Transaction Tax when purchasing an additional property in Wales.
Meanwhile the Welsh government supports giving renters the chance to keep the last two months of their rent as compensation when experiencing a no-fault eviction.
Propertymark said implementing additional financial penalties for landlords is counterproductive when they are already witnessing substantial increases in tax hikes, mortgage rates, and repair costs, as this could further thwart the supply of rental homes, and therefore, cause rents to increase.
Therefore, the trade body said that boosting supply is the most effective way to even out rents and stop additional market distortions.
Propertymark has been a member of the Welsh government Fair Rents and Adequate Housing Stakeholder Group, where it argued against rent controls.
Data from Rent Smart Wales demonstrates that rent controls would result in a number of landlords leaving the sector, further squeezing supply.