Demand from lockdown-inspired moves have boosted prices and activity, with sales up 40% on same time last year
Average house prices in Wales continue to set new records as they reached £212,751 in Q1 2021 (January – March), with annual house price inflation climbing to 10.1%, the first double-digit percentage increase since 2005.
The figures have been released from Principality Building Society’s Wales House Price Index for Q1 2021, which demonstrates the rise and fall in house prices in each of the 22 local authorities in Wales.
Lockdown-inspired changes in housing demand and government policy interventions around Land Transaction Tax (LTT) have boosted prices and activity, with sales up by 40% on the same period in 2020. Every local authority in Wales has reported a rise in house prices in the first quarter of 2021 when compared annually to Q1 2020.
Across Wales, prices of detached, semi-detached and terraced homes are 10% or more higher than the same time in 2020, but flat prices continue to languish.
Tom Denman, Chief Financial Officer at Principality Building Society, said:
“The bounce back of the housing market during the pandemic has been stronger than some had anticipated, and if that momentum is maintained, it may be that the strong housing market recovery will continue through the rest of the year and into 2022. Pent-up demand due to a shortage of houses on the market, continuing low interest rates, wage growth for those in work, plus the incentive of the Land Transaction Tax, has led to this new record peak of average house prices.
“Looking further forward this growth could be impacted by the end of the LTT holiday and the furlough scheme, but much will depend on the overall recovery on the economy.”
Estimated sales in Q1 were up 40% on the same period last year, albeit with a clear demarcation between house and flat sales. According to monthly data from HMRC, there were 3,880 sales in January, 4,610 in February and 8,170 in March – clear evidence of the incentive effects of the Land Transaction Tax holiday.Eight local authorities saw new record highs during Q1, in Bridgend (£191,810), Cardiff (£269,826), Carmarthenshire (£196,422), Denbighshire (£201,091), Newport (£228,876), Swansea (£213,819), Vale of Glamorgan (£303,807), and Wrexham (£198,944).
House prices rose at the fastest rate in Swansea, with an annual increase of 16.1%. Anglesey (14.6%), Vale of Glamorgan (14.6%), and Carmarthenshire (14.2%) followed closely behind, highlighting the COVID-induced “race for space” with these being popular choices for city dwellers from Wales or England.
It was a mixed picture in terms of quarterly performance, with prices lower in seven local authority areas – the sharpest falls being seen in Monmouthshire (down 5.8%), Conwy (down 4.5%) and Gwynedd/Neath Port Talbot (both down 3.5%), albeit in all cases on the back of record prices in the previous quarter.