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Welsh house prices reach new peak in Q2

Welsh house prices rose to a new average peak price of £215,810 in Q2 2021, with the strongest rate of growth reported over the past year, according to Principality Building Society’s Wales House Price Index for Q2 2021.

Despite annual house price inflation of 12.5%, there was some sign that the strong pace of increases seen around the turn of the year have begun to abate, with the quarterly rate of increase now down to 1.4%.

This is likely to be a result of the Land Transaction Tax (LTT) holiday coming to an end in June, and could indicate price growth slowing in the second half of 2021.

Principality’s House Price Index estimates that there were around 13,400 transactions in Q2 2021, nearly treble the COVID-depressed level of the same time the previous year (4,800 sales), but also significantly higher than the more ‘normal’ period of Q2 2019 (11,000 sales).

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All 22 local authorities reported rises on an annual basis in Q2, repeating the performance of the previous quarter.

Prices in eight authorities reached new peaks in Q2 – Blaenau Gwent (£128,441), Bridgend (£214,081), Conwy (£222,944), Merthyr Tydfil (£159,101), Neath Port Talbot (£160,324), Rhondda Cynon Taf (£150,726), Vale of Glamorgan (£330,396) and Torfaen (£198,476).

Nine local authorities reported annual price increases of more than 15%, with Blaenau Gwent (19.6%), Bridgend (19.4%), Carmarthenshire (19.9%) and Conwy (19.7%) all reporting an annual rise of almost 20%.

Many of these local authorities also reported strong quarterly gains, in particular Bridgend (11%) and Merthyr Tydfil (15%).

A small majority of local authorities (12 of the 22) reported minor quarterly decreases, which may be a further sign that a gentler period of price inflation lies ahead.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Three major Welsh cities – Newport, Swansea and Wrexham – along with Powys, all reported quarterly prices around 5% lower.

Tom Denman, chief financial officer at Principality Building Society, said: “The scale and strength of the housing market in Wales to date does suggest that this momentum will continue into the final quarters of the year.

“Clearly, the stimulus effect of the Land Transaction Tax holiday will have disappeared by then, and because some purchases were brought forward to capture that benefit, there will be an inevitable dip in activity.

“Alongside this, the furlough scheme ends in September, thus further revealing the underlying state of the economy and employment.

“Various forecasts suggest that Wales -along with other parts of the UK- will see house price inflation down to just under 5% in 2022 and onwards.

“Much will depend on the course of interest rates and the economy, but the mortgage market remains very competitive with rates having fallen in recent months after slightly increasing at the height of the pandemic.”

By Jake Carter

Source: Mortgage Introducer

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Welsh house prices exceed £200,000

The average house price in Wales has topped £200,000 for the first time – now standing at £209,723, Principality Building Society’s Wales House Price Index for Q4 2020 has found.

Last year showed the strongest annual house price inflation in 15 years (8.2%).

Detached home prices were 11% higher than a year ago, as people search for space prompted by the pandemic.

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This is compared with 5-6% growth for most other property types.

Tom Denman, chief financial officer at Principality Building Society, said: “The strength of the housing recovery in the second half of 2020 is striking, and this reflects both the stimulus provided by the Welsh government in terms of the time-limited Land Transaction Tax holiday, the pent-up demand which built up during the first lockdown, and the race for space to buy bigger properties with larger gardens.

“In Q4, all local authority areas were reporting house prices higher than a year earlier. This increased demand has been driven by increased savings in many households during the lockdowns coupled with continued historic low mortgage rates. There has probably been some additional demand from buyers across the border with England, with house prices more affordable in Wales in relative terms.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“The recent UK HM Treasury review of independent forecasts for 2021 showed wide divergences in house price expectations for the year. With so many unknowns it is impossible to offer a forecast with any reasonable accuracy. However, once there is more clarity on the containment of the virus and on the full re-opening of the economy, it will become easier.”

Merthyr Tydfil recorded the strongest rise on a quarterly basis of 18.2%, taking its average house price to £147,687, though this may have been exaggerated due to a modest amount of sales data.

In north Wales, Anglesey house prices rose by 16% annually to £237,782, while Conwy (£224,068) and Flintshire (£216,224) rose by 13.7% and 13.3% respectively.

In south Wales, Monmouthshire (£332,558) and Newport (£222,107) also achieved strong annual double-digit increases, rising 14.2% and 12.1% respectively.

BY RYAN BEMBRIDGE

Source: Property Wire

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