House prices in Wales
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House prices in Wales reach record high according to Principality

Average house prices in Wales continue to beat records, reaching £212,751 in Q1 2021, according to Principality Building Society.

Annual house price inflation climbed to 10.1%, the first double-digit percentage increase since 2005.

Lockdown-fuelled changes in housing demand and government policy interventions around Land Transaction Tax (LTT) have boosted prices and activity, with sales up by 40% on the same period in 2020.

Every local authority in Wales has reported a rise in house prices in the first quarter of 2021 when compared annually to Q1 2020.

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Across Wales, prices of detached, semi-detached and terraced homes were found to be 10% or more higher than the same time in 2020, but flat prices have continued to languish.

Estimated sales in Q1 were up 40% on the same period last year, albeit with a clear demarcation between house and flat sales.

According to monthly data from HMRC, there were 3,880 sales in January, 4,610 in February and 8,170 in March.

Eight local authorities saw record highs during Q1: Bridgend (£191,810), Cardiff (£269,826), Carmarthenshire (£196,422), Denbighshire (£201,091), Newport (£228,876), Swansea (£213,819), Vale of Glamorgan (£303,807), and Wrexham (£198,944).

House prices rose at the fastest rate in Swansea, with an annual increase of 16.1%. Anglesey (14.6%), Vale of Glamorgan (14.6%), and Carmarthenshire (14.2%) followed closely behind.

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It was a mixed picture in terms of quarterly performance, with prices lower in seven local authority areas – the sharpest falls being seen in Monmouthshire (5.8%), Conwy (4.5%) and Gwynedd/Neath Port Talbot (3.5%).

Tom Denman, chief financial officer at Principality Building Society, said: “The bounce back of the housing market during the pandemic has been stronger than some had anticipated, and if that momentum is maintained, it may be that the strong housing market recovery will continue through the rest of the year and into 2022.

“Pent-up demand due to a shortage of houses on the market, continuing low interest rates, wage growth for those in work, plus the incentive of the Land Transaction Tax, has led to this new record peak of average house prices.

“Looking further forward this growth could be impacted by the end of the LTT holiday and the furlough scheme, but much will depend on the overall recovery on the economy.”

By Jake Carter

Source: Mortgage Introducer

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Wales
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Wales Continues to Experience House Price Growth

House prices in Wales have reached an all-time peak, with the average house price across the country now £193,254, despite a drop in overall sales in 2019.

The figures have been released from Principality Building Society’s Wales House Price Index for Q4 2019, which demonstrates the rise and fall in house prices in each of the 22 local authorities in Wales.

In 2019, the average house price in Wales grew by 3.3%, a £6,237 rise since December 2018 driven by first time buyers and holiday homes. Over the quarter in Wales (October – December 2019), house prices rose by 1.7%.

Despite house price growth in 2019, house sales were down by 6% in 2019 compared to the previous year. The reduction is likely to be due to the uncertainties associated with Brexit and then latterly the December General Election.

“It’s been a decent year for average house price growth in Wales, mainly supported by historically low interest rates, a shortage of housing supply and relatively high employment. First time buyers were the driving force behind housing sales, with holiday homes also performing well.

“Although Brexit uncertainty and the General Election had a greater impact on the housing market in the south of England, sales were still down by 6% in Wales in 2019 compared with 2018. Now that there is a bit more clarity politically, we will wait to see if house sales pick up in 2020, although we anticipate continued modest growth in terms of house prices as a whole.”

 Denman, Chief Financial Officer at Principality Building Society

At the end of 2019, eight local authority areas established new peak prices – Bridgend (£180,988), Denbighshire (£192,665), Gwynedd (£190,868), Merthyr Tydfil (£141,657), Monmouthshire (£298,618), Rhondda Cynon Taf (£142,733) and Swansea (£188,417).

Principality’s House Price Index figures show that the largest decrease in sales in Q4 2019 compared to Q4 2018 have been flats, down by 32.6%, followed by detached properties which were down by 12.5%. Semi-detached sales reduced by 9.6%, with terraces down by 6.5%, which supports indications that first-time buyers are now more attracted to terraced and semi-detached properties, rather than to small city centre flats.

In the past decade (December 2009-December 2019), house prices in Wales have risen by 24.5%. Over this same 10-year time span, the CPIH index for consumer price inflation has increased by some 22.6%. This means that the average house price in Wales has grown in ‘real’ terms by just 1.9% in the past decade.

Cardiff tops the list with house price growth of 41.2% for the decade, followed by Torfaen at 37.7% and Newport at 33.4%. The top nine authorities in terms of growth are all located in the south-east corner of Wales – which may indicate the extent to which Cardiff, and the Severn Bridge tolls, have had an impact on housing demand, and therefore house prices, in this area over the last 10 years.

The ‘top’ location for house price growth in the north of Wales is Denbighshire, at 23.5%.

By MARK POWNEY

Source: Business News Wales

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Forecast Predicts House Prices in Wales will Grow by 18% in 5 Years

Global real estate firm, Savills has forecast strong house price growth of 18% in Wales over the next five years, which would make it one of the fastest-growing markets in the UK.

While housing supply is almost meeting need, there is still a shortfall in the provision of affordable homes in Wales. The predicted house price rises are expected to put further pressure on the sector.

Caroline Jones is an associate director in Savills development team in Cardiff, specialising in residential development.

She comments:

“The value of residential property in Wales is fast catching up with the rest of the UK. The removal of the Severn Bridge tolls this time last year has already had an impact on prices in the south east of the country and this is likely to ripple out further in coming years. While this is good news for home owners, it will push the limits of affordability for more households, making the requirement for affordable provision increasingly urgent.”

2,592 new affordable homes were delivered in 2018/19, up from 2,316 in 2017/18, while the Welsh Government expects to have completed 3,569 during 2019/20. Despite the improvement in delivery rates, it currently still falls 33% short of the requirement of 3,895 more affordable homes per year over the five years[1] to March 2024, as set out by the Government earlier this year.

The average annual requirement of 3,895 affordable homes over the next five years, set out by Government earlier this year, equates to 47% of new homes built between 2019 and 2024. However, Savills figures show that only 34% of new homes completed since 2010 were affordable.

Commenting on the research, Caroline said:

“Welsh Government is aiming to build 20,000 new affordable homes over the next five years, an ambitious target in the current climate. Not only does it mean upping annual delivery to 4,000, there is already an accrued shortfall to address.

“Whilst the target to develop is welcomed, as it should contribute to addressing the affordability issue, it undoubtedly puts pressure on providers to deliver. This new drive is also an opportunity for those in the sector to innovate and ultimately to provide the quality, as well as the volume of affordable stock we need.”

“We are seeing action within the public sector, with councils gearing up to develop stock and strategic initiatives by Housing Association involving private sale to cross-subsidise the affordable housing provision.

“The challenges are significant. Availability of land is an issue, which is resulting in private and public sector housebuilders competing for the same sites. A shortage of skills and labour is another key barrier to overcome in order to upscale to this level.”

Help to Buy has been a major factor in the new build market, accounting for 20% of all new home sales since 2015 and this reached 25% of housing supply in 2018. During 2019, the number of Help to Buy sales fell back slightly to 20% of all new homes to September 2019, however it remains a key contributor to new homes delivery.

Welsh Government has yet to make a decision on whether to follow England in extending Help to Buy beyond 2021. This creates uncertainty for housebuilders, who will currently be buying land to develop after this date. Focus will also turn to affordable housing providers, who will try and address this issue by creating alternative low cost home ownership style products.

By MARK POWNEY

Source: Business News Wales

House sales
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House Sales in Wales up by 6% as Prices Fall

House sales are up by 6% in Q1 of 2019 compared to Q1 2018, with Principality Building Society suggesting first-time buyers are making the most of the opportunity of relatively affordable house prices in parts of Wales.

However, the average house price in Wales has fallen to £185,018, with the annual growth of 0.4% the lowest since August 2013.

The figures have been released from Principality Building Society’s Wales House Price Index for Q1 2019 (January – March), which shows the rise and fall of house prices in each of the 22 local authorities in Wales.

House prices across the country have fallen by an average of 0.8% in Q1 of 2019.  According to Principality’s House Price Index for Wales, the decline in quarterly prices has been caused by uncertainty surrounding Brexit, with many buyers and sellers waiting for a clear decision on the future of the country’s position in Europe before committing to the purchase or sale of a property.

Annual house price growth is low compared to the same period last year due to the sales of more expensive properties ahead of the introduction of the Land Transaction Tax in April 2018, which resulted in a rise in stamp duty for mid to high end priced homes.

Overall, there were 15 local authority areas in Wales where prices fell in the quarter.

Seven local authorities saw a rise in house prices, however, including the more affordable regions of Neath Port Talbot (1.9%), Blaenau Gwent (1.1%) and Merthyr Tydfil (0.5%), which Principality suggests has been helped by first-time buyers remaining keen to get on the property ladder in those areas.

Tom Denman, Chief Financial Officer at Principality Building Society said:

“As anticipated, we have seen a quarterly decline in house prices which is connected to the ongoing economic uncertainty caused by Brexit.

“House sales are up year on year, with Brexit seemingly not having the same negative effect on the number of sales that are taking place in the Welsh housing market as it has in southern parts of England, in particular.

“The south-east of Wales continues to see house price growth as a result of the abolition of the Severn Bridge tolls and the widening commuter belt between Bristol and Cardiff. With political uncertainty continuing, it’s difficult to gauge whether the market will bounce back in quarter two or will continue to show signs of slowing.”

Cardiff (£235,361) and Conwy (£190,125) reached new peak prices in March 2019. In Cardiff, this was driven by a rise in the prices of semi-detached properties and flats. In Conwy, detached homes – the most frequently purchased property type in the area – saw the largest rise, up by an average of £40,000 in March 2019 compared to the year previous.

By  MARK POWNEY

Source: Business News Wales