House sales down by 18% in September compared with August
· House prices fall for a fifth consecutive month, but smaller drop than in August
· The average price of a house in Wales fell another £647 in September
Richard Sexton, director of e.surv, part of LSL Property Services, comments: “The constrained mortgage finance market is the underlying factor behind Welsh house price falls for a fifth consecutive month in September. Ultimately, it is the lack of mortgages being granted to buyers with smaller deposits, rather than weak demand, which is knocking chunks off house prices in many areas of Wales.
”However, the lead up to the end of the year should see an improvement. There are signs to suggest mortgage lending will pick up in Wales in the fourth quarter. Already, mortgage lending has been higher in October, which should translate into more sales before Christmas for committed purchasers. The Funding for Lending scheme is also helping bolster the mortgage market which, in turn, should ultimately help give the housing market a boost. Underlying demand for property is still strong from prospective buyers and FLS has improved lenders’ capacity to increase mortgage lending, although tough capital adequacy requirements will prevent a significant improvement in lending to buyers with small deposits.
“The future performance of house prices in Wales will partly depend on policy set out in the Welsh National Housing Strategy, including the provision of new and affordable housing in Wales. On a regional basis, Swansea and Cardiff have seen growth in affordable housing stock as developers have focused on these areas. Property prices in the more affluent areas such as Cardiff and the Vale of Glamorgan are actually rising as there are more equity rich buyers who are not limited by the availability of mortgage finance. The recently announced Welsh New Buy scheme also offers hope for up to 1000 new build purchasers a year. However, like the national Rugby team, the market has some way to go before it can reach past high levels of performance.”