Fall in Welsh house prices continues
The average price of a house in Wales was £151,821 in April, an increase of £310 (0.2%) from January, but a fall of £219 from March.
Earlier in the year there had been some hope that the overall downward trend was being reversed. However, the evidence of the last two months suggests that this is not the case. Indeed, prices are now £18,465 or 10.8% below their historic 2007 peak of £170,286. The annual rate of change at -1.3% is also greater than last March’s.
Richard Sexton, director of e.surv, part of LSL Property Services, said: “Unlike the rest of Britain the Welsh housing market remains in slow reverse: prices plummeted £2,048 in the past year.
“However, outside of Wales, only Londoners saw their houses rise significantly in value in April. Sales in Wales are depressed compared to England, but London is the exception, not the rule, so the dramatic comparison is unclear.
“The torpor in the Welsh market is due to inadequate mortgage availability for first-time buyers. Encouragingly, more Welsh buyers are making enquiries – and plans for new estate agency businesses are also rumoured, so the interest is there. It’s the inaccessibility of mortgage finance for the average buyer that’s reining in demand.
“High rents and growing inflation are reducing the amount first-time buyers can set aside to meet the large deposit requirements required by lenders.
“Average prices rolled backwards by £219 in the past month. Despite the positive start to this year prices now stand a long distance away – 10.8% lower – from their record peak in 2007.
“Even by historic standards it’s poor. And the sinking prices are bucking the usual summer trend of sales rising as the summer season begins.
“Within the country, there is a clear north / south divide. The 14 southernmost areas of Wales saw prices fall almost 19%, standing in stark contrast to the rise of 2.2% in prices in the six northernmost areas. Not only does this point to the population variations in different parts of the country, it also shows parts of Wales remain in post-industrial decline.
“The lending picture is in need of a blast of colour to help clear weak points in the Welsh housing market. Indigenous lenders are doing their bit but wider support from the mainstream sector is also needed for a sustained recovery.
“Voices are also calling out for the Welsh government to do more to help first-time buyers. The Help to Buy scheme is a step in the right direction but wealthier buyers will continue to have an overly large impact on the market and house prices as the year goes on.
“Hopes are high that the Government’s new initiatives will put the Welsh housing market back on course.”