The Welsh housing market has proved remarkably robust during 2025 with house prices showing annual growth and sales activity at its strongest in several years, according to a new analysis by Savills.
According to the research, house price growth stood at 3.1% in the year to September 2025 and at 2.2% in the first nine months of this year, while sales transactions exceeded 2024 levels by 12.4%, supported by gradually falling mortgage rates and improving affordability.
This is an outperformance of the UK market, which saw prices rise by 2.3% in the year to September and by just 0.5% in the first nine months of 2025.
In the rental market, rents for new lets grew by 3.3% in the year to August 2025, but affordability has improved, with tenants now spending 31.7% of income on rent, down from 34.5% last year.
However, despite this positive market backdrop, the outlook for housing development remains concerning. New home completions have fallen to their lowest level in over a decade, starts also sit at a record low, and planning consents have dropped by 26% year-on-year – signalling a weak outlook for delivery.
New homes completions dropped by 9% in the year to June, have been falling on an annualised basis for four years now, and have dropped by -31% since their peak. Planning consents meanwhile were the lowest on record in Q2 – the 648 consents granted in the quarter was -67% fewer than the number in Q2 2024. Annualised consents are now less than half the level they were during the post-pandemic peak.
“Despite the remarkably resilient market, our analysis shows a downward trend in the delivery of new homes in Wales, with completions, starts and consents all at a record low,” said Dan Hill, Savills Residential Research.
“Progress is being made on replacement Local Development Plans, but we are seeing limited capacity to deliver on Plan targets. Resource, or lack thereof, is and will continue to be a significant issue in the coming years, alongside more localised challenges such as nutrient pollution, with the number of new homes likely to continue to fall based on this evidence.”
Wales’ Help to Buy scheme is making a difference, the analysis shows, accounting for 9% of new homes in the year to March 2025. This is broadly consistent with its use over the last few years but significantly below its peak in 2018.
Emily Williams, Savills Residential Research, said:
“The extension of the Help to Buy scheme in Wales in January to September 2026 was good news for first-time buyers and for the sector, helping new homes maintain a competitive advantage over second-hand, therefore aiding viability.
“However, the value cap remains unchanged from 2014, while house prices have increased, limiting the positive impact.”
The report points to a more positive performance in the affordable housing sector, with delivery having hit a new high in the year to March 2025. A provisional 3,660 new affordable homes were built during this period – 12% higher than the previous year. However, there remains a shortfall of over 7,000 homes to meet the Welsh Government’s target of 20,000 affordable homes by March 2026.
The research report was launched at an event held during Hugh James Housing Week 2025. Around 50 invited stakeholders attended the event hosted at the firm’s headquarters in Cardiff, which saw Savills partner with Hugh James to discuss Wales’ real estate future.
Caroline Jones, Savills Cardiff, who organised the event on behalf of Savills, said:
“The research presents a mixed picture of the housing market in Wales. On the one hand it shows impressive resilience, especially considering the political and economic uncertainties this year, while on the other, it highlights the significant challenges we face in terms of delivery – both in the private and affordable sectors.
“We know that the demand for land is particularly strong from both the private and affordable housing developers in Wales. It is crucial that more development opportunities become available not just to deliver much needed housing options, but because of the significant economic impact. Building has such a positive impact on local communities by delivering social value, training and employment opportunities.”
Caroline O’Flaherty, Partner at Hugh James, said:
“As the Head of Social Housing at Hugh James, it was a delight to collaborate with Savills again as part of Housing Week 2025. The Savills report is one of the highlights of Housing Week, where we focus on bringing together the housebuilding sectors for constructive discussions.
“The panel I chaired featured representatives from Welsh Government, the Development Bank of Wales, housing associations and the housebuilding sector. The discussion emphasised the importance of unlocking strategic public sector land, ensuring funding mechanisms are more innovative than grant alone, and the need to foster greater collaboration between registered social landlords (RSLs) and housebuilders on larger sites.
“Importantly, we witnessed the start of some key conversations on projects that will make genuine progress towards housebuilding targets. The overriding theme from the event was the need to unlock the planning system with sufficient resource to process applications swiftly, ensuring the delivery of the homes and communities Wales needs.”
