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House prices in Wales fall for five quarters straight

House prices in Wales have fallen to less than £230,000 after peaking at £249,000 at the end of 2020, research from Principality Building Society has revealed.

The average house price in Wales has fallen by 2.1% since last quarter and is now down 6.5% compared to the same period the previous year.

Shaun Middleton, head of distribution at Principality Building Society, said: “The downward trend of house prices has continued for the fifth consecutive quarter in Wales. Economic pressures, coupled with the higher cost of mortgages has meant affordability continues to be a problem for many buyers, placing undoubtable pressure on the housing market in Wales.

“The picture across Wales shows that overwhelmingly local authorities have been reporting price decreases, rather than increases, translating into another year-on-year falling of house prices.”

Compared with a year earlier, only four of the 22 local authorities reported property price increases, although the majority of these increases are nominal, Flintshire bucked the trend by reporting a double digit increase of 12%.

Five local authorities – Carmarthenshire, Denbighshire, Merthyr Tydfill, Powys, and the Vale of Glamorgan – experienced double digit price falls between 10% and 16% when compared to the same period the previous year, with the Vale of Glamorgan reporting the largest fall of 15.7%.

There were just below 8,400 transactions in Wales in the first quarter of 2024, 15% fewer than the last quarter of 2023.

This downward trend is reflected across the rest of the UK, with wider economic pressures facing the housing market acting as a major drag on demand and activity levels during the quarter. For Wales, quarterly sales transactions have declined continuously year-on-year since late 2021.

Middleton added: “Despite what has marked the most challenging housing market conditions since the Global Financial Crisis in 2008, the latest news that inflation continues to fall – although slower than anticipated – suggests that the housing market in Wales could soon see more positive signs.

“Many economic analysts have also predicted that the Bank of England base rate has peaked at 5.25 and will fall this year. This assumption is prompting better mortgage deals and easing the affordability of housing.

“Consumer confidence is also improving, along with wage growth, as pent-up demand for housing builds.

“Looking ahead, there may well be another fiscal event from the UK government, but at the very least a General Election on the horizon, and a newly formed Welsh government in Wales with a mandate to tackle affordable housing.

“Together with our insight, this suggests that this quarter may well represent the low point for house prices in Wales, which we expect to rise as affordability increases.”