Concerns have been raised in the Senedd over a growing trend known as “claim farming”, with fears it could place further strain on the already stretched housing market in North Wales and beyond.

Darren Millar, Member of the Senedd for Clwyd West, has warned that the practice — which has been seen in larger UK cities — is now beginning to emerge in Wales. He is urging the Welsh Government to investigate and take action.

Claim farming involves third-party firms, often referred to as Claims Management Companies, contacting tenants directly and encouraging them to make legal claims against their landlords, typically over disrepair issues. While tenants have a legal right to live in safe, well-maintained homes, critics argue that some companies exploit the system by pushing claims aggressively, sometimes without full context.

Speaking in the Senedd, Mr Millar said he was concerned the trend could have unintended consequences for both tenants and landlords, particularly in areas like North Wales where housing supply is already under pressure.

He warned that if landlords face increasing legal challenges and costs, some may choose to leave the rental market altogether — reducing the number of available homes and potentially driving up rents.

Responding on behalf of the Welsh Government, Jane Hutt said the issue was not widely recognised at a national level but confirmed it would be looked at further, particularly in partnership with organisations such as Rent Smart Wales, which oversees landlord registration and standards in Wales.

The rise of claim farming has been linked to tighter housing regulations and increased awareness of tenants’ rights. In England, similar concerns have been raised about firms encouraging tenants to pursue compensation claims, sometimes taking a significant share of any payout.

Housing experts have warned that while enforcement of standards is essential, there is a risk that misuse of the system could create friction between tenants and landlords, as well as additional pressure on the courts.

In North Wales, where many communities already face challenges around housing availability — including the impact of second homes and holiday lets — any further reduction in rental properties could have a significant knock-on effect.

Mr Millar said urgent attention is needed to ensure a balanced approach that protects tenants from poor housing conditions while also supporting responsible landlords.

As the debate continues, there are growing calls for clearer regulation of claims management companies and better guidance for tenants, to ensure legitimate concerns are addressed without destabilising the housing market further.