The LSL Property Services/Acadametrics Wales House Price Index, the only House Price Index for Wales, also revealed that Wales is also the only region, other than Greater London, where prices have gone up (0.7%) over the last year
Richard Sexton, director of e.surv comments:
“Wales is the only region in England& Wales where house prices have risen for six consecutive months. Even London can’t boast such consistent growth. What’s more, it’s also the only region outside of London where prices are higher than this time last year.
“But beneath the healthy headline figures parts of the market clearly aren’t in the pink. It is the fact that wealthier buyers, cash rich investors and retirees are buying up property, which is pushing up prices.
"They wield bigger deposits and hold more equity so, when needed, can access the cheap mortgage rates that are on offer. But it’s a less happy tale for first time buyers. They are stuck out in the winter cold because they don’t have the cash or the equity to secure a mortgage.
"Paltry savings rates make building a deposit a Herculean task for first time buyers. On top of that, banks are now demanding big deposits for affordable mortgages.
"Weak economic growth is limiting the amount they are willing to lend, particularly to lower income borrowers and first time buyers – who they perceive as higher risk.
“As a result, wealthier buyers and retirees represent a disproportionate share of the market. This is reflected in the disparity between the high prices for detached and semi-detached property, typically bought by wealthier buyers, and the low prices for flats, which are archetypal first time buyers’ stock.
“This imbalance will become more pronounced in 2012, with Welsh economic conditions weaker than the national average. For example Peacock’s - one of the country’s leading businesses, based in Cardiff - is currently teetering on the brink of administration.
"The Council of Mortgage Lenders has done its best to paint a bright picture of mortgage lending in the coming year, but the property canvass in the Principality is sure to darken for first time buyers.
"Spooked investors are less willing to invest in banking stocks, which is frightening the markets and pushing up the cost of funding for banks.
"They will focus mainly on shrinking their assets and protecting their balance sheets against more potential shockwaves from the Eurozone. New lending to first time buyers will be way down on their list of priorities.”
