Nigel Favas, Managing Director of Reeds Rains estate agents, who has branches in Wales comments: “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.”
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