Senedd 2026: Challenge, opportunity, or both?

The recent Senedd election will, without any doubt, go down in history as a watershed moment in the political history of Wales. The introduction of a closed-list proportional voting system and the expansion of the chamber to 96 seats delivered a Plaid Cymru minority government under the leadership of First Minister Rhun ap Iorwerth and, perhaps more importantly, an end to over a century of Labour Party dominance in the Principality. Our chief policy officer Chris Norris explains more.

For the private rented sector (PRS) and the wider residential living industry, the end of over two decades of Labour-led administration in Cardiff Bay looks likely to bring a change in housing policy direction and a new set of challenges.  

As Siân Gwenllian takes on ministerial responsibility for housing and planning, she will no doubt be keen to begin implementing some of the policies outlined in Plaid’s manifesto, which outlined a significantly more interventionist approach to housing policy. 

However, the realities of minority governance suggest a complex road ahead.  

Translating Plaid Cymru’s ambitious agenda for the private rented sector into actionable legislation will be challenging for the new First Minister, requiring considerable political skill and dexterity given the realities of the new Senedd’s parliamentary arithmetic.  

Of course, most landlords have better things to do than obsess over electoral calculus or supply and confidence measures, but it is important for us to understand these political dynamics if we are to plan, maintain, and invest over the next Senedd term.

More Regulation, rent controls and evictions

Plaid Cymru’s manifesto was clear in its desire to overhaul the PRS, driven by an ambition to legislate a 'right to adequate housing'. At the forefront of this agenda were proposals to end no-fault evictions, cap annual rent increases, and curtailing rental bidding. 

While the ambition to provide greater security for tenants is understandable, history and basic economics consistently demonstrate that rigid rent controls almost inevitably lead to a contraction in housing supply. An overly highly regulated environment, and worse yet one with constantly shifting requirements, risks deterring investment by both private landlord and those focused on primary housing delivery. 

Although it is as yet unclear what the immediate focus on the new administration will be, the sector must prepare for an acceleration in regulatory proposals. It is clear that well intentioned, but poorly targeted, regulation can harm investment confidence and the very tenants it seeks to protect by driving up costs and restricting choice.

The decarbonisation challenge

In common with policy makers across the border, a central pillar of the new government’s platform is dealing with energy inefficient housing stock.  

In fact, the incoming Government has declared renewal of its housing stock a "national mission".  

Some of the oldest and hardest-to-heat housing in Western Europe is situated in Wales, and Plaid Cymru has committed to an area-based, tenure-neutral approach to retrofitting. 

For property owners, this presents a double-edged sword.

On one hand, there is the looming prospect of stricter minimum energy efficiency standards, which will require significant capital outlay to upgrade properties.

On the other, the Government’s commitment to a holistic street-by-street approach may unlock more comprehensive grant funding mechanisms. If schemes like Green Homes Wales are expanded to properly include private landlords, it could provide a vital lifeline to help the PRS meet its decarbonisation obligations without rendering rental properties financially unviable. 

Depending on the approach adopted, and the realities confronted by the new Government in coming months, this could represent a reason for optimism, or it could become another stick with which to beat the landlord community.

The realities of a minority government

Despite these ambitious pledges, the most influential factor shaping the next few years of Welsh housing policy will be parliamentary arithmetic. With 43 seats, Plaid Cymru is six votes short of a working majority. 

To pass primary legislation, particularly concerning controversial issues like rent caps or eviction bans, the Government will need to build coalitions. With Reform UK forming the official opposition on a platform of deregulation - albeit countered by a great deal of hostility towards HMOs - Plaid will be forced to seek ad-hoc arrangements.

These will most likely be with the Greens, or potentially Labour. Although there could even be instances of allying with the Conservatives or Liberal Democrats depending on the issue. 

Furthermore, the fiscal reality of the Welsh budget remains incredibly constrained. Delivering on spending commitments for social housing and retrofitting while balancing other public service demands will require severe financial horse-trading. 

We can therefore expect some of the more radical manifesto pledges to be diluted, delayed, or abandoned entirely in the face of budgetary and legislative hurdles.

Engagement, not retreat

The Welsh housing landscape is undoubtedly changing, and the regulatory burden on the PRS is likely to increase. However, a minority government cannot govern by decree. In fact, no matter how radical it wishes to be they tend to be more reliant on compromise and consensus than majority administrations.  

Consequently, this is not a moment for the sector to retreat. We have an opportunity, as a landlords association, and as a sector, to argue for constructive and positive housing policies. The next few years are likely to be a critical window for active, data-driven advocacy.  

We have a chance to present the new administration with evidence-based solutions. By demonstrating the economic and social value of a healthy private rented sector and highlighting the essential role of private landlords in resolving the housing supply crisis, we can help shape a legislative framework that is fair to tenants and sustainable for housing providers. 

It is going to be undeniably challenging. There will be a lot of voices calling for interventions that would kill-off any green shoots daring to emerge from the last wave of ‘reforms’ but by focussing on solutions, and leveraging the vital role played by private landlords all across Wales, we have an opportunity to shape a practical new agenda.