Housing market is ‘rising steadily’
THE average house price in Wales has increased by more than £5,000 in the past year.
The latest House Price Index from the Principality found prices had increased by £5,133, or 2.9% over the past 12 months.
Over the past quarter the building society found prices increased by 0.2%, which is a lower rate than that seen during both quarters 3 (Q3) and 4 (Q4) in 2017. Housing sales are down by 4%.
Principality speculated on a couple of factors that could have been behind some of the changes in the market.
A new stamp duty, the Land Transaction Tax (LTT), came into being in Wales on April 1, to replace Stamp Duty Land Tax, with purchasers of properties in excess of £400,000 having to pay additional tax over the previous rates.
The building society speculates that there is a possibility some buyers brought forward their purchases to avoid paying the additional tax.
The Principality anticipates an upward revision to the March 2018 prices by the Land Registry, a consequence of people buying more expensive properties prior to extra stamp duty charges from the LTT in April 2018.
Monmouthshire had the highest rate of change in prices over the past 12 months at 8.6% and is also the local authority area with the highest average house price in Wales, at £279,434.
Principality notes the Severn Bridge toll fees are due to cease before the end of this year, making commuting to cities like Bristol much cheaper, and could see a rise in property sales in Monmouthshire and nearby towns and cities across south-east Wales.
In all, there are 10 areas where the annual price increase exceeded 4.5%.
Tom Denman, chief financial officer at Principality Building Society, said: “As expected, the Welsh housing market continues to grow at a modest, steady rate, as homeowners continue to take advantage of historically low borrowing rates.
“The market is still being driven largely by first-time buyers and remortgaging.
“The number of mortgages for first-time buyers is growing at twice the rate of the rest of the UK in Wales and it would appear Help to Buy Wales has clearly had a positive impact on the housing market.
“This is welcome news for those looking to step on to the housing ladder in Wales.”
The area with the largest increase in prices over the quarter was Wrexham, where prices have increased by 5.7%, followed by the Isle of Anglesey at 5.0%.
In Wrexham the price of detached homes has seen the largest increase in values, from an average £230,000 in Q4 2017 to £255,000 in Q1 2018.
Overall, there was an estimated fall of 4% in transactions in Q1 2018 compared with Q1 2017.
There was a decline in sales for each property type, with the exception of detached properties, where a small increase in sales is forecast at +2%.
A good start to 2018 is evident, the building society says, with transactions in January 2018 being the highest for five years, although it notes the introduction of the LTT may have had an effect.