LSL/ACADAMETRICS WALES HOUSE PRICE INDEX

 

Welsh house prices have dropped £2,500 in the past year

  • Prices decrease a further £338 since May and have fallen in 9 of the last 12 months
  • But new buyer enquiries reported up

 

House Price

Index

Monthly Change %

Annual Change %

£150,189

233.0

-0.2

-1.6

Oliver Blake, Managing Director of Reeds Rains estate agents, who has branches in Wales comments: ““Despite growing optimism regarding the market across the border, the Welsh housing market is still caught in the grip of the credit crunch. House prices have slipped by almost £2,500 compared to a year ago and have dropped again by £338 in the last month. Prices have fallen in nine of the last twelve months, thanks largely to the ongoing squeeze on personal finances.

“The mortgage market is thawing in England and parts of Scotland but the multiplier effect hasn’t spread to Wales. The Welsh economy is lagging behind the rest of the UK. It is more exposed to public sector cuts, and fewer jobs are being created than in other areas of the UK. Demand is lower as a result. In June this year sales were 12.6% lower than this same time last year, which has raised eyebrows. In Wales, there is a two-tier market, and there’s an unhealthy reliance on wealthier borrowers. These older buyers are in a stronger position to benefit from the record low mortgage rates, as they have been able to bank on the equity from their homes to grab cheap deals. Affordable rates are of little comfort for first-time buyers who can’t put down the big deposits required by banks and building societies. And this is continuing to quash activity and push down prices.

“More positively, the number of first time buyers is improving slightly with reports of new buyer enquiries in Wales shooting up in June to a level that is double the three month average. The Government’s efforts to boost lending to new buyers have been successful to a large part, thanks to the Funding for Lending and Help to Buy initiatives. The housing market is taking steps in the right direction, but more needs to be done to secure the recovery and increase its momentum.

“The spotlight is on the Welsh Government’s new plans to support the housing market: the Treasury is consulting on passing responsibility for stamp duty to the Welsh Assembly. Only time will tell but it’s more likely now to gain power over stamp duty, which will result in a good range of new policy responses to help deal with the nation’s housing problems. The stamp duty tax is a hindrance for both home movers and first time buyers. The Welsh Government needs to reduce the burden of taxation and make it easier for people to move home. The plans to focus on supporting new buyers, with the launch of the Shared Equity Scheme, and its aims to push demand and encourage a stronger supply of new build properties, will be key in boosting home ownership levels.”

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