House prices fall by 1.9% in Wales
House prices in Wales ended 2023 1.9% cheaper than they had been a year earlier amid widespread uncertainty in the market and massive hikes in mortgage rates.
While average prices have dropped 1.8% across the UK as a whole, with England seeing the largest drop at 2.9% compared with a year ago, prices have risen in Scotland and Northern Ireland.
Nationwide Building Society has said the average house price was unchanged during December compared to the month before. It means that average prices end the year 4.5% below the all-time peak in the summer of 2022.
Weak activity
The average price of a home in the UK was £257,443 in December according to Nationwide. With a significant contrast between the average for England and the other home nations.
According to Nationwide, the average house price in Wales now stands at £201,730 compared to England’s £296,231.
This data, however, contrasts widely with the latest figures from Principality Building Society’s Welsh Housing Price Index.
According to their data, which uses information from the Land Registry which was published in October, the average price of a home in Wales stood at £239,378 in the third quarter of the year.
Experts said that more positivity has started to enter the housing market in the last few months.
“Housing market activity was weak throughout 2023,” said Nationwide’s chief economist, Robert Gardner.
Rise in cash transactions
“The total number of transactions has been running at (about) 10% below pre-pandemic levels over the past six months, with those involving a mortgage down even more (about 20%), reflecting the impact of higher borrowing costs.
“On the flip side, the volume of cash transactions has continued to run above pre-Covid levels.”
The cost of borrowing has increased dramatically over the last two years, with the Bank of England’s base interest rate increasing from 0.1% in December 2021 to 5.25% today.
Nationwide said that house prices rose 4.5% in Northern Ireland in 2023, and in Scotland they were up 0.5%.
In England prices were down 2.9% compared to a year ago, and in Wales they dropped 1.9%.
Fewer buyer inquiries
East Anglia was the place where prices fell the most rapidly, down 5.2% year-on-year. Prices generally fell faster in the south of England than in the north.
Mr Gardner said: “A rapid rebound in activity or house prices in 2024 appears unlikely.
“While cost-of-living pressures are easing, with the rate of inflation now running below the rate of average wage growth, consumer confidence remains weak and surveyors continue to report subdued levels of new buyer inquiries.
“Moreover, while markets are projecting that the next Bank Rate move will be down, there are still upward risks to interest rates. Inflation is declining, but measures of domestic price pressures remain far too high.”
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Hopefully they will continue to fall so locals can afford to buy properties and not need to move to England for well paid jobs.