A surge in property sales following the end of the first lockdown in June has pushed the average house price up 3% annually in Wales to an average £196,165.
The figures have been released from Principality Building Society’s Wales House Price Index for Q3 2020 (July-September), which demonstrates the rise and fall in house prices in each of the 22 local authorities in Wales.
Wales also experienced growth in sale prices across the quarter by 2.2%, however the number of property sales was down by 58% between April and September when compared with the same period in 2019.
In September 2020, six local authorities in Wales – Bridgend (£190,948), Cardiff (£247,030), Carmarthenshire (£172,708), Gwynedd (£198,279), Newport (£213,660) and Powys (£222,992) reached a new record average house price. With the exception of Cardiff, these areas are all included in the top 11 local authorities in Wales with the highest proportion of detached or semi-detached homes, which would indicate they are likely to appeal to buyers looking for more spacious homes suited to lockdown living.
Mike Jones, Chief Risk Officer at Principality Building Society, said: “Although it might appear to be somewhat implausible to be reporting rising prices in the middle of a pandemic, we believe this reflects the increase in demand following the Q2 lockdown. It is also potentially the desire for a lifestyle change for some who during lockdown have realised that it is possible to work from home, avoiding the necessity to travel to work on a daily basis. The demand for larger homes with additional space, including outdoor areas, has consequently risen however, and with little new supply coming to the market, prices also rose rapidly.
“In terms of outlook for the market, the extension of the furlough scheme and mortgage payment deferral scheme could, in the short term, help offset the impact of weakening economic performance. However, many experts continue to forecast a rise in unemployment during the coming months and that will inevitably impact consumer confidence and the housing market.”
In Wales, the Land Transaction Tax (LTT) concession introduced in July moved the threshold from £180,000 up to a new level of £250,000 until 31 March 2021, worth a maximum of £2,450 to people who buy a property for this price.
Mike Jones continued: “Given the relatively low savings that can be obtained on the LTT duty in Wales, we do not consider the impact of the temporary rate will be as significant as it appears to be in England’s housing market. The temporary LTT holiday in Wales does not apply to second homes or buy-to-let properties, where an additional rate of three per cent remains payable.”
During Q3, the area with the highest increase in average house price was Gwynedd, which rose by 14.6%. In Gwynedd the price of detached homes increased from an average £250,000 during Q2 2020 to £280,000 during Q3 2020, however this increase in value was assisted by the sale of the area’s highest priced detached home of the calendar year at £1.2m.