Welsh house price sink £2,935 in the past year

Welsh house prices fell a further £1,552 from April according to the latest LSL/Acadametrics Wales House Price Index.

May’s monthly fall is the biggest since January 2012.

Richard Sexton, director of e.surv, part of LSL Property Services, comments: “The Welsh housing market is still caught in the clutches of restricted mortgage availability. Prices have fallen by almost £3,000 over the past 12 months, and £1,552 in the last two months. It’s a sharp contrast with England and particularly London, which is starting to fire at all cylinders. Buyers in Wales are struggling to get mortgage finances, which is clogging the whole property chain.

“But things are looking up. The lending environment is slowly improving for first time buyers, who are able to access wider and cheaper a range of mortgage deals. Low interest rates are helping and more affordable options are surfacing that are helping boost activity from the bottom end of the market. But deposit requirements remain the sticking point with plenty of buyers unable to cobble together enough savings while inflation remains high and wages remain suppressed. Wealthier buyers and equity-rich retirees represent the largest slice of buying power: this is sustaining sales-levels, and propping up prices.

“On a regional level prices tend to vary prominently depending on the distribution of wealthier buyers. Prices have fallen in poorer ends of the spectrum in areas with more first time buyers. The sinking prices are bucking the normal summer trend of sales rising over the summer and sales figures are below average historically, by almost half what they were in 2006.

“But given how difficult it is to get a mortgage at the moment, the small rise in house sales is a cause for celebration. Sales have increased by 6.2% compared to May 2012, reflecting the improvement in first-time buyers flocking to the market, many of who have been supported by improved lending conditions.

“The property market could do with a spark to boost its rate of recovery. The good news is that the Welsh Government plans to up its game, having recently announced the drafting of a new Housing Bill which will focus on the quality and supply of housing, as well as homelessness and the private rented sector. This bodes well for the future, while the long-term effects of the Funding for Lending scheme and Help to Buy feed through into the market. Hopefully this combination will drive the Welsh property market into safe territory as the year progresses.”

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