Welsh house prices fall
On an annual basis prices have fallen by 0.9%, with Wales remaining at the bottom of the league in terms of GB regional house price growth: only Scotland at -0.3% is also in negative territory.
Richard Sexton, director of e.surv chartered surveyors, said: “While the housing market across the UK makes a strong recovery, Wales continues to face an uphill struggle.
“House prices dropped in August and have fallen in nine out of the last twelve months. They fell by £373 in August and are £1,344 lower than twelve months ago.”
However despite the drop in prices further analysis of housing transactions found that the number of properties sales in Wales is continuing to increase.
Sexton said: “There is cause for optimism as sales activity is growing and first-time buyer activity has bounced back bringing a whole new burst of energy.
“House sales in Wales have continued to rise and for the second month running have reached a three and a half year high.”
However, unlike last month when the main boost to sales was from first-time buyers, the increase this month has been largely universal across all sectors of the market.
This suggests that first-time buyers have had a positive effect on the market by freeing up property chains, allowing transactions to be completed all the way up the property ladder.
Sexton said: “First-time buyers have unlocked property chains, allowing sales to ripple higher up the ladder.
“First-time buyers now make up a larger part of the property market in Wales, which has caused the fall in average house prices.
“More first-time buyers mean more properties have been purchased at the lower end of the market, therefore lowering the average value.
“In the long term the rise in first-time buyer activity will make the market healthier, as sales from second-time buyers and home movers will boost levels and help drive prices upwards again.”
On a regional basis the area with the highest rise in prices in the month was Cardiff, up 2.0%, followed by the Isle of Anglesey, up 1%.
The main increase in prices in Cardiff over the month were in semi-detached properties, up 3%. This was followed by detached properties and terraces, up 2% and 1% respectively, while the average price of flats fell by 3%.
On an annual basis prices have risen in 11 of the 22 local authority areas in Wales. There does not appear to be a geographic/demographic split in the areas which are seeing price rises or falls.
The only possible exception is in the north of Wales with the three adjacent areas of the Isle of Anglesey, Conwy and Gwynedd seeing a positive movement in prices, while Flintshire, Denbighshire and Wrexham are all experiencing strongly negative price growth.
Sexton said: “Demand is rising across the board and it is good to see there has been a rise in sales across all buyer types.
“The government’s Funding for Lending and Help to Buy schemes have stimulated the market significantly.
“An array of attractive mortgage products have entered the market left, right and centre thanks to increased mortgage supply and the rise in competition between lenders.
“The more progress made in the first-time buyer market, the more likely it is we will see green shoots of recovery and more buyers tempted to step back into the market.
“The Welsh market needs to focus on house building to give it the shot of adrenaline it needs to fuel growth and return to a full recovery.”