The July 2012 Welsh House Price Index from LSL Property Services/Academetrics has been released today, providing a measure of the average house price in Wales for July 2012.
- First time buyer numbers up 11% between Q1 and Q2
- House prices are up £1,513 on last year
Nigel Favas, Managing Director of Reeds Rains, who has branches in Wales commented as follows in the latest Welsh House Price Index Report from LSL Property Services and Acadametrics published 26th September 2012.
“Life has become markedly easier for Welsh first time buyers in 2012, but particularly so over the last couple of months. More new buyers have been able to access mortgage finance, which has jumpstarted the lower end of the market. It’s in stark contrast to England, where first-timer numbers have actually fallen since the end of March. Welsh buyers do have an advantage because first time buyer property in Wales is cheaper than elsewhere in the UK, meaning the deposits required aren’t quite as large. Two thirds of all first time buyer purchases in July were for properties worth under £125,000.
“First time buyers are the lifeblood of any housing market. The long term recovery of house prices is tied inextricably to how well new buyers fare. The fact that life is becoming marginally easier for them certainly bodes well for the future. But we shouldn’t get carried away just yet. Until the coalition cooks up a successful recipe for growth, house prices will remain broadly flat. It’s a similar story to the English and Scottish markets: all are hamstrung by a weak economy.
“Welsh house sales are still only 48% of what they were in the first half of 2007. And when the economy flounders, lenders toughen criteria on high loan-to-value mortgages and focus on protecting their balance sheets. That’s why equity-rich home buyers continue to represent a larger share of sales than they would in a healthy market. Areas such as Vale of Glamorgan, where there are more affluent buyers, have seen the biggest rise in house prices because of the higher demand for property. But on the flip side, less affluent areas have seen prices fall because it is harder for lower income buyers to access mortgage finance, which has reduced demand and dragged down prices.
“The fortunes of the market over the rest of 2012 will depend heavily on the government’s Funding for Lending scheme, which aims to provide banks with cheaper funds and, therefore, with more high loan-to-value mortgages. Banks and mutuals are already reporting that the scheme has encouraged them to up their lending targets for the next six months.”