The society’s latest house price index shows the rise and fall of house prices in each of the 22 local authorities in Wales.
The data revealed five areas achieved new record average prices in September 2018 - Vale of Glamorgan (£260,448), Powys (£217,265), Newport (£199,035), Caerphilly (£148,040) and Rhondda Cynon Taf (£136,189).
The highest price rises annually show a concentration in the south-east corner of Wales - Monmouthshire (+11.9%), Newport (+11.1%) and Torfaen (+8.1%) - indicating that the abolition of the Severn Bridge tolls this December has increased the commuter belt from Bristol. These changes will save daily commuters between Wales and Bristol up to £1,400 per year. The average house price in Bristol is £310,000, with many commuters said to be crossing the bridge to take advantage of lower house prices.
Tom Denman, Chief Financial Officer at Principality Building Society said: “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.
We know that numbers of first-time buyers is down slightly and it would seem the uncertainty around Brexit negotiations means owners are deciding to stay put rather than move. The buy-to-let market has also declined due to landlords being put off by tax disincentives. The picture of the market is consistent with the last couple of years and it would appear that this trend is set to continue in the short term.”
Ten years on from the financial crash of 2008 which impacted the housing market in the UK and elsewhere across the world, there are only two local authorities in Wales – the Vale of Glamorgan and Cardiff – where the rise in house prices has grown faster the Consumer Price Index (CPI), which measures the rate of inflation in the UK. With the CPI rising by 24.2% from 2008-2018, this means only the Vale (36.4%) and Cardiff (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 (September 2013 – September 2018), where the Consumer Price Index has risen by 7.9%, all bar one of the local authority areas have seen house prices rise at a faster rate than CPI during this shorter period. This means that house prices have been making gains in real terms for their owners. The one exception is Pembrokeshire, where house prices have risen by 6.2% over the last five years.
