2013 sees Welsh house prices rise £766
Despite the increase prices still remain £458 lower than February last year and have now fallen back to December 2010 levels.
Richard Sexton, director of e.surv, part of LSL Property Services, said: “The Welsh housing market received a boost in February but it is by no means set on the road to recovery.
“The bad weather may go some way to explaining the lack of sales at the start of the year. Prices continue to fluctuate, as they have done over the past twelve months and lending conditions remain tough.
“House sales are still very low by past standards, primarily due to the lack of activity from the bottom end of the market and the difficulty first-time buyers are having in getting loans.”
LSL found that older, wealthier buyers are now dominating activity and their influence may be the only thing preventing house prices from falling even further.
Sexton said: “There is an affordability crisis in the property market which is alienating first-time buyers, many of whom are struggling to drum up a big enough deposit.
“Mortgage lending remains constrained and this is freezing lots of first-time buyers out of the market.
“In fairness to banks they have their hands tied by strict requirements on the amount of capital they have to hold in reserve, which is limiting their capacity to lend.”
The Welsh housing market is also struggling due to issues in the wider economy. The Welsh economy has taken heavy blows recently from inflation, weak wage growth, public sector cuts and a lack of private sector investment.
Sexton said: “These blows haven’t sunk it but they have left it relatively incapacitated. Given these economic problems the Welsh Assembly’s decision to cancel its NewBuy scheme is disappointing, though the UK Help-to-Buy proposals may ultimately fill this gap.
“Thankfully, 2013 is set to be the best year for the housing market since 2007 and brighter days are moving onto the horizon.
“Mortgage rates are lower and there is a better range of mortgage deals compared to a year ago. And the first-time buyer market is slowly picking up – albeit from a very weak base.
“With the capital’s football team set for the Premiership next season, perhaps better days could lie ahead in 2013.”