PwC’s latest UK Economic Outlook has revealed that house prices in Wales have risen more than any of the 12 UK regions in the 12 months to April 2019.
Its 6.7% growth outstripped its nearest rival – the East Midlands (2.9%) – and the UK average of 1.4%. The greatest fall in house prices was in London, where they dipped by 1.2%.
The average house price in the UK in 2018 is £228,000, while in Wales it was £157,000 – making it the fourth cheapest region to buy a home.
Over five million households live in privately rented accommodation in the UK. Using the conventional benchmark that renting must cost less than 30% of gross annual income for it to be considered affordable,
At 23% on the rental affordability ratio for 22-29-year-olds in 2018, places Wales third, just behind Yorkshire and The Humber and the North East (both 22%), making Wales a very affordable place to live.
Key workers in Wales such as NHS employees, teachers and police officers also benefit from cheaper rent in relation to their pay. Private rents are generally considered affordable across professions in Scotland and Wales, with the rental affordability ratio ranging between 15% and 22% for the professions studied in the report.
For context, the rental affordability ratio for primary and nursery teachers in Wales is 16%, while in London it is 40%.
John-Paul Barker, Regional Leader for West and Wales, commented:
“Our figures show that Wales remains one of the most affordable places to live in the UK, whether that’s buying a house or renting privately.
“In other parts of the UK such as a Southern and Eastern England, we risk seeing professions that are integral to the UK’s public services struggling to afford to rent. That is not the case in Wales, which remains affordable for key workers and the young.
“House prices have risen and will continue to rise in Wales, but again they remain affordable in relation to other parts of the UK. It’s now about continuing to provide opportunities for people to move to and work in Wales, as showcased by Wales Week in London, which PwC will again sponsor next year.”
John Hawksworth, chief economist at PwC, said:
“In Scotland and Wales, private rent levels are on average more affordable across professions with the affordability ratio ranging between 15% and 22%, although this may not be true in hot spots such as Edinburgh or Cardiff.
“The last five years has seen rental affordability ratios deteriorate and, in the UK as a whole, the amount spent on rent over this period has grown by 8%, while at the same time earnings growth remains relatively weak and below levels seen before the financial crisis. This is not only having an impact on social mobility, it will also hinder national productivity growth in the longer term by preventing people from moving to places in the UK where they can be most productive.”