Wales' average house price tops £200k in 'race for space'

Anglesey saw a 16% increase in house prices in 2020, according to the Principality

The average house price in Wales has gone over £200,000 for the first time, the country's biggest building society has said.

The Principality said lockdown had encouraged a "race for space" with people buying larger properties with bigger gardens.

Eighteen of the 22 council areas in Wales saw record prices in the last three months of 2020.

But sales were down 21% over that period compared with the previous year.

All council areas saw an increase in prices from 2019.

The average price for a home in Wales is £209,723.

The Principality's House Price Index does not take account of inflation over years so this is the "nominal value" rather than the "real value".

Taking account of inflation, Wales was 7% below the record high from September 2007 but is the highest since July 2008 in real terms.

Prices rose by 8.2% in 2020, the highest rate of increase in 15 years.

But there are concerns that some people might find themselves unable to get on to the property ladder due to rising prices.

Not all property types are increasing equally, with demand for detached houses higher than other homes and the price of flats "languishing since April 2020".

The Principality index is based on sales figures from HM Land Registry.

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There were double digit increases in annual prices in Anglesey (16%), Conwy (14%), Monmouthshire (14%), Flintshire (13%) and Newport (12%).

Bridgend, Ceredigion, Gwynedd and the Vale of Glamorgan were the only council areas that hadn't experienced peak prices but had still seen an increase from 2019.

The Welsh Government removed land transaction tax from all property sales below £250,000 from July 2020 to March 2021, saving buyers almost £2,500 in tax per sale.

Buyer struggling to find affordable home

Elfed Wyn Jones: "When the rare opportunity comes up with something in our price range, it gets sold quite quickly"

Elfed Wyn Jones returned to live at his family's farm near Trawsfynydd, Gwynedd, last year after losing his job in Aberystwyth due to the pandemic.

He and his girlfriend, Anwen Duncan, would like to buy their own family home nearby with at least two bedrooms and they could afford a mortgage of up to £110,000, but he often sees places selling for in excess of £200,000.

"When the rare opportunity comes up with something in our price range, it gets sold quite quickly," he said.

He suggested a cap on the number of holiday lets in areas to stop them from "driving up prices".

"I know of about seven or eight of the couples in Trawsfynydd who'd love to buy a house and start a family but, again, the houses that are in their price range and my price range tend to sell like hot cakes," he said.

"It's quite heart-breaking really."

Estate agent expects market to 'take off again'

Estate agent Dafydd Hardy said buyers are looking to "change lifestyle"

North Wales estate agent Dafydd Hardy said business had been "good" over the last year which he had not expected due to the pandemic.

He said buyers have been looking to "change lifestyle" such as up-sizing.

"They've focused on their needs really, and that's what has created the market," he added.

He said the current lockdown measures had hit the market, with house sales down about 40% locally compared to last year.

"But we are expecting that the market will take off again."

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Tom Denman, chief financial officer at Principality Building Society, said: "The strength of the housing recovery in the second half of 2020 is striking, and this reflects both the stimulus provided by the Welsh Government in terms of the time-limited land transaction tax holiday, the pent-up demand which built up during the first lockdown, and the race for space to buy bigger properties with larger gardens.

"This increased demand has been driven by increased savings in many households during the lockdowns coupled with continued historic low mortgage rates.

"There has probably been some additional demand from buyers across the border with England, with house prices more affordable in Wales in relative terms," he added.

House prices across the UK rose by 6.5% last year, according to Nationwide.

But the Halifax suggested there had been a drop in prices UK-wide between December and January.

"On a range of metrics - buyer inquiries, instructions to sell, agreed sales, activity per surveyor and sales to stock ratio, Wales was equal to, or outperformed, the most active of English regions," the House Price Index concluded.