February saw the average price of a house in Wales reach £151,810, an increase of £766 (0.5%) from January, according to the latest LSL / Acadametics Wales House Price Index.
This takes the price back to nearly its December 2012 level and almost to the price in August last year.
However, Dr Peter Williams, chairman of Acadametrics, said this small change may well be the result of a rise in transactions in December which, it had been hoped, would presage an upward swing. He said it would be hard to argue any form of more permanent swing into positive territory on the back of this tiny uplift. Indeed, prices are almost where they were in December 2010 and represent a fall of -3.5% over a 36-month period, he noted.
He added: “At least the price change is positive and the annual rate of downward change has slowed this month as well. Lending to first time buyers increased during the last quarter of 2012. Against this, RICS reports a fall in new buyer enquiries in February, together with a drop in new vendor instructions. It is also interesting to note that 78% of RICS surveyors reported unchanged prices over a three month period in Wales, with just 4% reporting a rise.
“Anecdotally, the RICS members across Wales also report varying experience – from optimism in Cardiff to much less enthusiasm in the North. This does reflect our view of a far from uniform market in the Principality, as we have reported in the past. There is no question though that the weather will have had a significant effect on house sales in the early part of the year and this again is reflected in the RICS members’ views.”
Richard Sexton, director of e.surv, part of LSL Property Services, said: “The Welsh housing market received a boost in February, but it is by no means set on the road recovery. House prices rose £766 over the month, but remain £458 lower than February last year. And prices have fallen back to their December 2010 levels – a 3.5% fall over a thirty six month period.
“The bad weather may go some way to explaining the lack of sales at the start of the year. Prices continue to fluctuate, as they have done over the past twelve months, and lending conditions remain tough. House sales are still very low by past standards, primarily due to the lack of activity from the bottom end of the market and the difficulty first time buyers are having in getting loans.
“Instead, older, wealthier buyers are the ones dominating activity, which is preventing house prices from falling even further. There is an affordability crisis in the property market which is alienating first-time buyers, many of whom are struggling to drum up a big enough deposit.
“Mortgage lending remains constrained and this is freezing lots of first- time buyers out of the market. In fairness to banks, they have their hands tied by strict requirements on the amount of capital they have to hold in reserve, which is limiting their capacity to lend.”