This leaves the average price of a home at £969 lower than January 2012, standing at £151,099.
Richard Sexton, director of e.surv, part of LSL Property Services, comments:
“The Welsh housing market stumbled in January. House prices fell £591 over the course of the month, and are £969 lower than January last year. After the winter months there are traditionally conspicuous drops in prices as people tend to save their personal finances and grow a nest egg after an expensive Christmas period.
“Whether there will be a spring bounce in 2013 is tricky to forecast under current conditions: buyer confidence is low thanks to the problems dogging the economy. January sales are 48% lower compared to the previous highs in 2007, which is casting shadows of doubt over the market’s ability to recover to anything like its previous levels. The lack of mortgage finance to lower income borrowers is the main barrier to an improvement in sales and prices. Mortgage rates have fallen which is helping, but deposit requirements and criteria are still challenging.
“Capital adequacy requirements remain stringent, and are making banks reluctant to significantly increase their mortgage lending. It is older and wealthier buyers that are supporting sales levels. Yet there is hope: lending to first- time buyers is climbing gradually, and the increase in the number of loans in the final quarter of 2012 is the greatest it has been in five years, since the last quarter of 2007.
“There are stark differences in prices depending on each individual authority. The market resembles a complex jigsaw reflecting uneven house prices: while 11 authorities witnessed prices changing by 2% or less, in another six authorities the change increased above 6% and in Gwynedd and Ceredigon they were around 9%. In rural areas the price of commuting and rising expense of travel costs are having an effect on house prices as seen in the rest of the UK.
“It is crucial the Government focuses on getting mortgage finance to those at the bottom tier of the housing market. There’s a striking lack of first-time buyer activity by past standards – the main reason why the recovery has been pedestrian. On the flip side the wider variety of mortgage deals on offer signals first time buyers in Wales should have a slightly easier ride in coming months.”
