The average price paid for a house in Wales in October was £154,696, LSL Property Services and Acadata have reported.
This represents an increase of £1,125 compared to September, and of £3,137 since the beginning of this year. On an annualised basis, prices have now risen in the last three months, with the rate of increase also higher at 1.4% in October. The last time that prices were in excess of £154,000 was in November 2011.
Comparing the annual change figure, Wales remains in the bottom three of regional changes at +1.4% (the other two being the North at +1.3% and Scotland at +1.0%), and is some way below the equivalent overall annual figure for England & Wales of 4.4%.
On a regional comparison basis however, the Wales monthly rise at +0.7% was in the top three (after East and West Midlands at +0.9% and +0.8% respectively): this excludes Greater London, but even that figure was only +1.0% in October. It also puts Wales very near the England & Wales monthly average of +0.6%.
Richard Sexton, director of e.surv chartered surveyors, part of LSL Property Services, said: “The housing market in Wales has turned over a new leaf and is clearly entering a new phase, with pent up demand and strong competition driving house price growth and rising sales. The market is powering ahead, with prices increasing by £1,125 compared to September, representing the third monthly price rise, while prices are up by £3,137 since January 2013. New buyer enquiries, sales and price expectations are all above the three-month average illustrating the strong headway being made.
“Sales in particular are now standing at the highest level since December 2007, and momentum is building further – thanks to the boost in consumer confidence and the improving economic picture. Now that mortgage rates have dropped to record lows, aspiring homeowners are starting to have more chance to put together the money required for a deposit. As a result there are bursts of first time buyers pouring into the market with much more zeal, with Wales has seen a higher loan-to-value ratio than elsewhere in the UK. While there’s an improvement in the home movers sector of the market too.
“First-time buyer homes are proving particularly popular in Cardiff. Prices in the capital are up 7.4% on the year, setting a new record price, while many other parts of Wales remain more subdued. Without doubt, Cardiff is a different kettle of fish from London and South Wales is no South East of England, but as a whole the housing market in Wales is making strong strides forward nonetheless. Regionally however, some areas do differ more than others in terms of performance due to their local economies. Wage growth is still slow, and across Wales this will prevent prices from rising too quickly.
“What’s key is that we see steady, house price growth to ensure sustainable growth. When it launches on 2nd January, the Help to Buy Wales shared equity scheme will provide a new opportunity for first- time buyers and existing home owners on new-build properties. But as the scheme is geared up at new-build properties, which represent only a smaller proportion of total housing sales, we expect the scheme will not – by and large – drastically affect overall prices.
“However house-building in Wales is still below pre-recession levels and this supply remains an area that needs to be addressed in order to continue the positive growth. While, the UK Government’s decision to withdraw the Funding for Lending scheme indicates that the more recently announced Help to Buy schemes are offering significant support to the sector, more can be done. In the coming year much will be determined by the development of the jobs market in Wales.”
