House prices reach all time high in Wales and the commuter belt widens
The Principality Building Society has released data confirming that Welsh house prices have reached an all-time high. The recent lender index puts the average house price in Wales at £184,722.
The most significant uplift has occurred across the South East of Wales, where property prices in Monmouthshire have risen by 11.9 per cent, closely followed by Newport up 11.1 per cent and Torfaen increasing by 8.1 per cent.
In December, tolls were removed to cross the Severn Bridge, amounting to an annual saving for daily commuters between Wales and Bristol of as much as £1,400; this has triggered a demand for property in this part of Wales.
Removing the toll has opened up the commuter belt from Bristol and increased demand for homes in this corner of Wales. Incomers are attracted by the affordable housing with an average property in Newport costing £199,035 compared to Bristol, where the average home is £310,000.
Tom Denman, Chief financial officer of the Principality Building Society said: “The index looks at how prices have changed some 10 years on from the financial crash of 2008. There are only two local authorities in Wales, the Vale of Glamorgan and Cardiff, where the rise in house prices has grown faster than inflation.
We can see that there has been some fluctuation in the market as prices artificially dipped after the introduction of the land transaction tax but have made a recovery this quarter. However, overall sales volumes are 3% lower than a year earlier which reflects the sense of caution in the market and uncertainty around Brexit negotiations making owners more likely to stay put. The volume of first time buyers has lowered slightly.
With the Consumer Price Index (CPI) rising by 24.2% from 2008 to 2018, only the Vale with growth of 36.4% and Cardiff with growth of 31.8% have seen house prices grow in real terms, with all other local authorities failing to maintain average house prices at the same rate as consumer price inflation.
Over the last five years, however, where the CPI has risen by 7.9%, all bar one of the local authority areas have seen house prices rise at a faster rate, so values have increased in real terms. The one exception is Pembrokeshire, where house prices have risen by 6.2% over the last five years.”
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