House prices in Wales have reached an all-time peak, with the average house price across the country now at £184,722, the latest lender index shows.
While there is some regional variation five areas achieved new record average prices in September 2018 with the Vale of Glamorgan at £260,448, Powys at £217,265, Newport at £199,035, Caerphilly t £148,040 and Rhondda Cynon Taf at £136,189.
The data from the Principality Building Society also shows that the highest price rises annually show a concentration in the South East corner of Wales with Monmouthshire up 11.9%, Newport up 11.1% and Torfaen up 8.1%.
It suggests that the abolition of the Severn Bridge tolls in December has increased the commuter belt from Bristol and thus demand for homes in this part of Wales. 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.
‘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,’ said Tom Denman, chief financial officer of the Principality Building Society.
‘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,’ he explained.
‘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,’ he added.
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.
With the 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 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, 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.
