House prices in Wales have hit a new record in the latest figures released by the Principality Building Society.
The new all-time high is an average price of £186,699, just over £2,000 more than the previous record set in the building society’s last report. It is 3% higher than for the corresponding period of Q4 in 2017, but prices were sluggish in the latter part of 2018 and increased by just 0.3% – a fall from 3.6% in the previous quarter.
Newport and nearby areas lead the way
The south-east of the country featured three areas – Monmouthshire (£290,437), Newport (£199,046) and Caerphilly (£155,672) – all returning a new record high price. Newport’s proximity to the now toll-free Severn River crossings has helped a surge in prices in the city, with its average price still around £100k less than that in trendy Bristol across the river.
Average prices in Caldicot and Chepstow, two towns in Monmouthshire near the Severn bridges, have gone up by 12% and 16% respectively since the scrapping of tolls was announced in July of 2017.
Wales performs well in other housing figures
The Principality’s findings for Wales are broadly in step with other data recently released. Rightmove show an annual uptick of 4.3% while Your Move record a rise of 3.6% – and both return an average price of a shade over £188k.
“Housing transactions for Wales are broadly the same, or we estimate it will be broadly the same as 2017, at about 48,000,” says Tom Denman, the Principality’s Chief Finance Officer. “When we look at the fundamentals of the housing market, and what drives some that demand, there are a number of reasons.
“Some of that could be that mortgage rates are at a historic low and have been so for a number of years now. Unemployment remains low, and we’re starting to see wages rise faster than inflation. When you put that together, that really drives the reason for the demand for housing. On top of that, we’ve seen a number of the housing schemes that the Welsh Government has backed.”
The introduction of the Land Transaction Tax in Wales last year, replacing stamp duty, means that the average mover in Wales paid only £236 on average in duty, around £1,000 less than under the previous system. That, and the need for more housing stock, is helping to fuel the surge in Welsh prices.
Denman adds, “There’s stamp duty levels or land transaction tax levels and thresholds go up and there’s still actually a lack of supply of housing. That has underpinned the growth in house prices.”
