27 Jun

Reeds Rains MD Nigel Favas Comments On Latest Welsh House Price Index

Posted 27/06/2012 by: Reeds Rains

The April 2012 Welsh House Price Index from LSL Property Services/Academetrics has been released this week, providing a measure of the average house price in Wales for April 2012.

  • The Welsh housing market struggles in April as house sales drop off by 17.5%
  • House prices decline £400 month on month
  • However prices are up 1.1% on last year
Data from the Welsh House Price Index for April 2012.

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 27th June 2012.

 “A combination of a constrained mortgage market for first-timers and adverse weather conditions dampened housing market activity in April. Several parts of Wales saw twice the normal amount of rain in April, restraining buyers’ enthusiasm for viewing properties, and this has hampered competition for properties on the market. However, the longer-term effect of the absence of thousands of first time buyers - still struggling to secure mortgage finance - continues to be felt throughout Welsh housing market, reining in house sales and keeping prices deflated on a monthly basis. As a result, transactions fell by -17.5%. This is more than three times the seasonal drop we would normally anticipate.

“Lenders are facing strong pressure on their ability to lend, as a result of the ongoing financial crisis abroad, and have adopted an incredibly cautious stance towards those without substantial deposits and spotless credit. As a result, many Welsh first-time buyers may feel that homeownership is a distant reality. Nevertheless, some relief may come from the Bank of England’s new funding for lending, which, if successful, could allow mortgage lenders to pass on more affordable rates to new buyers.

“While house prices in Wales dropped by £400 on a monthly basis, the annual improvement points to resilience in some parts of the market. Wealthier buyers and equity-rich retirees remain a key driving force, with activity at the top end of the market comparing favourably to a year ago, after the trough caused by the new, higher stamp duty on purchases over £1 million.

“The buoyancy of the upper tier of the market was reflected in the regional disparity of annual house price rises. Those with the highest average prices - Monmouthshire and the Vale of Glamorgan - saw the largest increases, while Blaenau Gwent, with the lowest average price, saw the biggest fall - highlighting the two speed nature of the Welsh housing market.”