Budget offers positive funding increases, but housing pressures persist

Housing, councils and support for housing markets

A budget agreement between Welsh Labour and Plaid Cymru includes £112.8m additional resource funding for local government, described as supporting an overall 4.5% increase to the local government settlement.

For property agents, this matters because councils influence the day-to-day running of the housing system. Funding levels can affect how quickly planning applications are processed, how much enforcement work can be done, and how much support is available for people at risk of homelessness. All of this can have knock-on effects on supply, demand, and how smoothly transactions and tenancies can move through the system.

Propertymark has consistently highlighted that housing pressures cannot be tackled without reliable funding for the services that stop problems escalating. In our response to the Draft Budget, we called for more certainty so councils can plan and act earlier, including clearer engagement with the private rented sector as part of prevention.

Land Transaction Tax and home ownership

The Final Budget confirms no changes to Land Transaction Tax (LTT) at this stage, with LTT revenues shown at around £399m for 2026-27.

Stability is helpful, but Propertymark has previously called for longer-term reform that better distinguishes between short-term and long-term rental investment. We have also highlighted the case for strengthening access to home ownership, including expanding Help to Buy Wales to include existing homes, not just new builds, to give first-time buyers more choice.

Homelessness prevention and support

£2.6m additional resource funding is targeted at homelessness prevention and support, aimed at easing frontline pressures.

Agents often see the impact of homelessness pressures locally, whether it is rising demand for private rented homes, delays in moving households on from temporary accommodation, or pressure on council teams. We continue to stress that prevention works best when help is consistent, and there is a clear route into settled accommodation. When access to private rented homes is limited, pressure builds elsewhere in the system, including temporary accommodation and wider council services.

Business rates and high street confidence

For commercial property and town centre businesses, the Budget outlines additional funding of £65M to support the business rates transitional relief scheme. This is linked to reforms taking effect from 1 April 2026 following revaluation.

The package includes a standard multiplier of 0.502 for 2026-27, described as the first reduction since 2010, plus a new retail multiplier of 0.350 intended to support small to medium retail shops. A higher multiplier of 0.515 is set to apply to the largest properties (by value) to offset revenue foregone through the retail multiplier. Transitional relief is designed to limit bill increases, including support for ratepayers whose liability rises by more than £300 following revaluation.

For agents working with shops, offices and mixed-use properties, this is relevant because business rates costs can affect tenant demand, lease negotiations, and whether premises remain viable. Reforms and reliefs should support thriving town centres and avoid unintended impacts on the viability of premises, including for property businesses with customer-facing high street locations.

Town centres, regeneration and bringing homes back into use

£8m of Financial Transactions Capital will be provided to Transforming Towns, offering loan support via local authorities to help unlock regeneration projects.

Regeneration funding can influence local market confidence, footfall and investment over time. Alongside regeneration, Propertymark continues to highlight the opportunity to increase supply by bringing empty homes back into use, and we urge the Welsh Government to review how empty homes support is targeted so long-term vacant homes can return to occupation more quickly, including where appropriate routes exist through the private rented sector.

Energy efficiency: support must work across tenures

The Green Home Wales Scheme will get an additional £2m, bringing total funding to £5m in 2026-27. The scheme is aimed at helping homeowners who can borrow but cannot meet upfront costs for energy efficiency and clean heating upgrades.

Energy upgrades increasingly affect valuations, buyer expectations and conversations with landlords and tenants. Propertymark supports decarbonisation ambitions, but our position remains that funding must be workable and must not unintentionally reduce rental supply by making upgrades unaffordable or impossible to finance. We have previously raised concerns that some Welsh schemes focus on owner-occupiers while offering limited routes for landlords, despite the PRS being essential to meeting demand.