While Wales house prices have fallen this year the county of Monmouthshire is proving to be a notable exception, Principality Building Society’s Wales House Price Index shows.
In Monmouthshire, which is in the South East of Wales near Newport, prices have risen by 12.4% and 15.4% on a quarterly and annual basis respectively, bringing the new average house price to £415,000.
The area is known for its beauty, containing Brecon Beacons National Park, Wye Valley Area of Outstanding Natural Beauty, Usk Valley and Gwent Levels.
The success of Monmouthshire compares to a quarterly reduction of 1.2% and an annual increase under 1%, bringing the typical price in Wales to £242,076.
Shaun Middleton, head of distribution at Principality Building Society, said: “In Spring we saw a few signs that market sentiment was recovering, after being hit badly by the turmoil following the UK government’s Autumn mini-Budget.
“However, activity in Q2 has been a little weaker than in Q1 and further weakness now seems likely. This picture is repeated across Wales, with the significant majority of local authorities reporting price falls in the latest quarter, as well as year-on-year.”
When comparing average price by property type in Wales, detached homes are the only type maintaining a slight increase year-on-year with a 0.7% annual rise to a new average price of £360,302. While average prices for semi-detached homes have fallen annually by 1.1% to £219,460, terraced homes have fallen by 1% to £171,546 and flats have fallen by 4% to £154,508 when compared to the same period last year.
Middleton added: “Our last outlook offered up a modestly optimistic view of the future based on the market expectation that interest rates were nearing their peak. However, since then, to fight inflation, the Bank of England has continued to raise the base rate with a 0.25% rise in May and a 0.5% rise in June (so currently standing at 5%).
“Financial markets are now expecting further rises, continuing throughout 2023 and into 2024, perhaps peaking at 6.5%. Constant rate rises have led to mortgage product repricing, and inevitably this has been disruptive.
“Higher rates also impact the amount people can afford to borrow, as a result sellers have found it harder to attract buyers and some have been forced to offer discounts and lower their expectations in order to secure sales.
“While few are forecasting a full-scale housing market recession, it is quite clear that the market is becoming more difficult.”