Welsh housing market bucking national trend
THE housing market in Wales is bucking the UK trend with rising house prices and growing sales according to new figures released today.
The latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey shows that while newly agreed sales across the UK generally were stagnant in March, in Wales they rose at the fastest rate in four months.
It’s the latest report to reveal a healthy housing market in Wales, with figures released by Principality Building Society earlier this week showing that the average price of a house had reached a new high of £174,319.
It means that average house prices in Wales are now 2.5% higher than at their pre-crisis peak in October 2007.
Principality said the rise in house prices over the last four years had been helped by the historically low interest rates, with the Bank of England base rate having been held at 0.5% from March 2009 till last August, when it was further reduced to 0.25% in the wake of the Brexit referendum.
At the same time the employment rate has risen from 67% in 2009 to 73.3% in January.
Tom Denman, interim finance director at Principality Building Society, said: “While the average house price in Wales has steadily climbed to reach a new high, there are signs that the market is cooling slightly. While higher employment, consumer confidence and low interest rates have helped to keep the market demand steady, a rise in the cost of living could result in house prices growing at a more modest rate during the rest of the year.”
The RICS survey’s key price indicator was at its highest level for Wales since mid-2014 last month. Surveyors also expect prices and sales to continue rising in Wales in the three months ahead.
But the RICS survey suggests that longstanding challenges remain on the supply side. While new instructions to sell rose in March they did so at a relatively weak rate and off the back of a prolonged period of no growth.
The Principality figures showed that transactions were down 13% over the last three months compared to the same period in 2016, when there was a spike in sales ahead of the introduction of a 3% surcharge in stamp duty on second homes and buy to let properties.
RICS residential spokesperson for Wales Tony Filice said: “We are seeing rising numbers of people registering to buy, but in March there were fewer properties than I would expect coming onto the market for that time of year.
“In our experience, sales activity is good, particularly in the £250,000 – £350,000 price range, due to demand exceeding supply. This is putting upward pressure on prices.”
Mr Filice, who is also director of Kelvin Francis in Cardiff, added: “However, in the two week run up to Easter, we have seen something of a late surge of new instructions coming onto the market. We will wait to see if it is perhaps a turning point in terms of supply finally now catching up.”
David James, of James Dean in Brecon, added: “March was very busy with sales, but new instructions are down.”
The main findings of the RICS survey were as follows:
■ 42% more surveyors said that prices rose in the past three months than those who said they fell;
■ newly agreed sales rose in March;
■ price expectations remain positive while sales expectations are also relatively healthy;
■ new instructions to sell were up by a net 10%.
According to the UK House Price Index, house prices have gone up 1.8% in Wales over the past year. The index puts the average price of a house in Wales at £145.294 in February.
Average house prices in the UK rose by 5.8% in the year to February, according to the index.