A Welsh estate agency claims it was forced out of business after a tax raid on second homeowners sent demand plummeting.

Jane Edwards, who manages Pembrokeshire Properties, said the policy was “the nail in the coffin” for business and now it will cease trading at the end of October.

Pembrokeshire County Council implemented a 200pc council tax premium on second homeowners in April this year amid concerns they were pricing locals out of the region.

It came after Welsh Labour last year gave local authorities the power to implement premiums on holiday homeowners up to 300pc.

Ms Edwards, 66, said: “The increase in council tax has been the nail in the coffin for us – there is no demand for second homes anymore. We went from selling 60 properties in the 2021-22 financial year to just 10 this year. I put in £30,000 of my own money to help us stay afloat – I won’t ever see that again.”

Earlier this month it was revealed TV presenter Carol Vorderman was selling her own Pembrokeshire holiday home after her council tax bill tripled.

And authorities in other holiday hotspots including Devon and Cornwall are also planning to raise council tax on second homes by up to 300pc. This has caused the number of properties for sale in Cornwall’s Truro region to spike by 47pc.

Policies that encourage second homeowners to sell up are designed to make homes more affordable for first-time buyers and locals. But, Ms Edwards said they are far wide of the mark.

She told The Telegraph: “It has not changed anything for first-time buyers. The demand is so strong for those homes anyway that the prices have not moved. The homes that end up being sold due to this policy are £250,000 and over, which first-time buyers here do not look at.

“The market is flooded with these second homes, and they lose their value because there are no buyers. They are put off by the increased council tax, in addition to the 3pc stamp duty surcharge on second homes and higher mortgage rates.

“Smaller estate agents are being forced to either leave the industry, or go and work for a big company like Purplebricks but give up their own business.”

The issue is compounded by fears that Chancellor Rachel Reeves will increase capital gains tax (CGT) during Labour’s October 30 Budget. The levy is paid on the sale of second properties meaning some panicked owners are racing to sell up ahead of the prospective change.

Locals are concerned that an exodus of second homeowners from Pembrokeshire is having dire consequences for its tourism industry.

Last year was “quite a challenging year for the [Welsh tourism] industry”, with one in three businesses seeing fewer visitors than during the previous year, according to the Welsh government.

Carol Peett, founder of local estate agent, West Wales Property Finders, said: “[The rise in council tax] is hitting local businesses – shops, cafes, restaurants, tourist attractions.

“It is also impacting employment, particularly of young people. Cleaners and tradesmen who service the properties are being hit extremely hard, as they rely on the income from second homeowners for their main income.”

Ms Edwards said: “Pembrokeshire became a ghost town in the 1980s – nobody was coming to the area. It has taken a long time to build it back up.

“It isn’t the locals who spend the money here, it’s the out-of-towners. If they stop coming, I’m worried that the area will just recede back to what it was like before. This means less choice for locals, and ultimately higher prices.

“[The council] is out of touch with reality. They sit in their ivory towers and make legislation without consulting the man in the street.”

Pembrokeshire County Council was approached for comment.