The LSL/Acadametrics House Price Index shows that in July the average price of a house in Wales fell back below the £150,000 mark for the first time since July 2011.
The average price paid for a house now stands at £149,769 which represents a decrease of £250 (-0.2%) since June, and of £1,750 (-1.1%) since the start of 2013. Nine of the last 12 months have seen a fall in prices, although the rate of decrease has lessened over the last two months.
On an annual basis prices have fallen by 1.5% with Wales continuing to be at the bottom of the league in terms of British regional house price growth, with only Scotland (-1.1%) and the South West (-0.1%) also being in negative territory.
Richard Sexton, director of e.surv chartered surveyors, part of LSL Property Services, said: “The housing market is recovering quickly across most parts of the UK, but not in Wales. House prices have fallen in nine out of the last 12 months. They fell by £250 in July and are £2,241 lower than 12 months previously.
“Things are starting to look up though. First-time buyer activity has had a major boost, providing some comfort amid the trials and tribulations. Sales in Wales reached a three and a half year high in July, thanks to the influence of first time buyers. The Government’s Funding for Lending and Help to Buy schemes have had a positive impact, and the Welsh housing market is slowly but surely moving forward on the road to recovery. Increased mortgage supply and stronger competition between lenders, resulting in better pricing, have lifted the market.
“The fall in the average house price has been partly caused by the increase in first time buyer activity. Most of the properties being purchased are at the lower end of the price spectrum which drags down the overall average. The rise in first-time buyer activity will make the market more fluid as sales from second-time buyers and home movers will result in levels rising which will start to push prices back up again.
“On a smaller scale, it is clear, regional house price growth is directly linked with the way each area’s immediate economy operates. Employment rates and job expectations are key factors in determining the level of housing demand in the UK. Prices fell in 13 local authorities and rose in 9, and the region with the largest monthly fall (Merthyr Tydfill) had the second highest unemployment rate in Wales. Demand for properties is high, but many Welsh first time buyers are finding it tough to secure a mortgage. Many are still locked out of the market altogether and are having to stay in rental accommodation, which is putting pressure on their personal finances and making it tough to save for a deposit.
“The Government’s role is crucial in driving the rate of recovery forward, as the Welsh market is in need of a revival in new properties in order to promote a healthy housing market. The good news is the lending environment has warmed up and will continue to unlock the pent up demand from first-time buyers.”
