Average house price increased by 0.5% in November to £152.083, down 1.6% year on year, according to the latest LSL Property Services/Acadametrics Welsh index.
The aggregate 1.6% November fall for Wales compares favourably with the fall of 2.3% in October but less so with the 0.4% fall reported in September.
Prices have been falling across Wales with decreases in 17 of the 22 unitary authority areas, compared with 18 last month. Flintshire, Newport, Swansea, Rhonda and Merthyr Tydfil were the exceptions, with rises of 2.4%, 8.4%, 1.6%, 2% and 1.9% respectively.
The figures indicate that price changes in unitary areas appear to be steady with the Isle of Anglesey an exception, showing a fall of over 7% as compared with one of just 0.7% the previous month. In contrast Newport saw prices rise 8.4% compared with 2.5% in October.
‘Although 2012 was a year of trials and tribulations for the property market, things are looking up for 2013. House prices climbed by £701 in November, signalling a gentle change in direction, following the six months of consecutive falls over the summer,’ said Nigel Favas, managing director of Reeds Rains estate agents, who has branches in Wales.
‘The slight price improvement is comforting but it is only a small step on a long road to recovery. Annual sales levels in November 2012 are half what they were in 2006/2007. While the Welsh market is soldiering on, there is a big imbalance of first time buyers to equity rich borrowers with wealthier borrowers dominating activity,’ he pointed out.
‘If we peer beneath the positive headline figure, we see house prices are £2,458 lower than they were this time last year, and prices have fallen in 17 of the 22 local authority areas in Wales. First time buyers face a tough task in putting together the deposit required to even get a toe near the property ladder,’ he explained.
‘This is taking a toll at a time when rents are high and the cost of living is rising sharply. Weak economic growth is limiting the amount lenders are willing to lend, particularly to lower income borrowers and first time buyers who they perceive as higher risk. For this reason there is a lack of mortgages for first time buyers, which is stifling sales higher up the housing chain,’ he added.
In 2013 the introduction of the mortgage guarantee scheme, which the Welsh housing minister has claimed may add £500 million over a five year period, should improve the availability of mortgages, according to Favas.
Peter Williams, housing market specialist and Chairman of Acadametrics, believed that a market recovery in London and the South East of England will slowly have an effect on other regions like Wales, but this will take time.
‘Potentially, the Welsh market should see an effect. Possibly, in the longer term as well, developments such as the expansion of broadband, enabling work to be undertaken at home, may make the more affordable mortgage repayments in Wales attractive to those struggling with house prices and high monthly charges in the South East and Greater London,’ he said.
