The average price of a house in Wales in November was £152,083, an increase of £701 or 0.5% from October, according to the latest LSL Property Services/Acadametrics Wales house price index.
Additional September transactions reported for earlier months have given small boosts to the September and October average prices, such that prices have recovered over the last 3 months.
Dr Peter Williams, chairman of Acadametrics, said: “A steady fall from the level in the Spring has been stemmed. But, just how much the market has struggled is shown by the fact that this month’s average price is barely more than that in December 2008 which was £151,966. A more recent comparison is with the £152,063 average in January 2012.
“The November price uplift reduces the annual change rate from -2.3% in October to -1.6% in November. Within the mainland as a whole, only Wales, Scotland (-3.8%) and North West (-0.5%) are still suffering from an annualised price fall. However, the recent monthly price gains, albeit small, suggest that of these Wales may be the first to recover. Even so, small rises will not overtake the real falls in property values represented by a 3.0% rate of inflation.”
Richard Sexton, director of e.surv, part of LSL Property Services, added: “Although 2012 was a year of trials and tribulations for the property market, things are looking up for 2013. House prices climbed by £701 in November, signalling a gentle change in direction, following the six months of consecutive falls over the summer. The slight price improvement is comforting but it is only a small step on a long road to recovery. Annual sales levels in November 2012 are half what they were in 2006/2007. While the Welsh market is soldiering on, there is a big imbalance of first-time-buyers to equity rich borrowers with wealthier borrowers dominating activity.
“If we peer beneath the positive headline figure, we see house prices are £2,458 lower than they were this time last year, and prices have fallen in 17 of the 22 local authority areas in Wales. First-time buyers face a tough task in putting together the deposit required to even get a toe near the property ladder. This is taking a toll at a time when rents are high and the cost of living is rising sharply. Weak economic growth is limiting the amount lenders are willing to lend, particularly to lower income borrowers and first-time buyers – who they perceive as higher risk. For this reason there is a lack of mortgages for first-time buyers, which is stifling sales higher up the housing chain.
“2013 offers more hope. The introduction of the mortgage guarantee scheme, which the Welsh housing minister has claimed may add £500 million over a five year period, should improve the availability of mortgages. No doubt this will send a positive wave of confidence through the Welsh property market.”