- Monthly change: -0.3%
- Annual change: -0.5%
According to the latest LSL Acadametrics data, the average price of a house in Wales in August was £151,004, which represents a fall of 0.3% or £416 from July.
It is the fourth month in a row during which prices have gone down, albeit at a slower rate - the fall was 0.6% last month. If we consider the year as a whole, prices have risen in five of the twelve months and have fallen in seven of them. However, the actual price falls have exceeded the rises, resulting in a 0.5% fall over the year, with the average price of £151,004 being only slightly higher than the equivalent figure in July 2011.
The number of transactions in August returned to more ‘normal’ levels for the time of year, following a subdued July, with sales over the last 12 months being 2% higher than the previous year.
Traditionally, sales in Wales in August are 2% lower than in July, as families start their summer holidays. However, this year we estimate that sales have increased by some 12% in August over July. This increase had more to do with poor levels of sales in July than with a sudden upsurge in demand during the month, with the level of transactions returning to the current ‘norm’, equal to that of June.
However, in September data, it is anticipated there will be a decline in transactions due to the knock-on effect of the Olympics, assuming that Wales follows the same pattern as England.
Richard Sexton, director of e.surv, part of LSL Property Services, comments:
“The negative effects of an anaemic mortgage market caused house prices to fall for a fourth consecutive month in August. Despite this, there is reason to believe the housing market is beginning to take some small steps to recovery. The market is certainly stronger than last year - prices climbed on an annual basis during most months, albeit this climb was followed by a small fall in August. The upside of lower prices is it becomes easier for first time buyers to get a foot on the ladder.
“Although mortgage finance is scarce, and the Welsh economy is weaker than its English counterpart, some solace can be found in the rising number of sales in Wales which have climbed 12% compared to July. Admittedly this reflects as much the weakness of July as it does an improvement in the market.
“Prices vary tremendously on a regional basis. Property prices in affluent areas such as the Vale of Glamorgan are increasing because they are home to a higher number of equity rich buyers who are less constrained by mortgage finance. In areas where prices are lower the reverse is true. In less prosperous parts of Wales there are fewer affluent buyers which keeps sales levels suppressed and drags down house prices. Detached properties are proving to be more popular than other types, such as flats, which are falling sharply in sales. The latter are usually bought by first time buyers, but the lack of mortgage finance for new buyers means fewer are being snapped up.
“The government’s Funding for Lending scheme will begin to flood the mortgage market with cheaper funds, which could help more first time buyers get a mortgage. However, lenders may choose to use the funds to increase lending to lower LTV borrowers, rather than to those with only small deposits.”
