House prices in Wales to be almost decimated in 2023 warns real estate company
A real estate company has predicted that house prices will be almost decimated in Wales over the next year.
Savills are predicting a 8.5% drop in house prices in Wales in 2023, and say that it could take up to three years for prices to recover to current levels.
Wales is expected to fare slightly better than the other nations of the UK, however, with England seeing an overall 10% drop in house prices in 2023. Scotland will see a 9% drop.
The fall in prices will come after Wales saw some of the largest rises in house prices in the UK over the last three years, as the rise in home working and ‘race for space’ during the pandemic led to 26.3% rise in prices according to UK Government statistics.
Savills had originally predicted just a 1% fall in house prices in 2023 but the disastrous mini-budget that sent mortgage rates skyrocketing has contributed to an expected deeper fall.
Those who want to move will sit on their hands and buy to let activity will drop off, they said.
Given the prospective path of the Bank of England base rate, the estate agent expects to see mortgage rates elevated through 2023 and well into 2024.
Wales will see a rise of 2% in house prices in 2024 and 3.5% in 2025, meaning that house prices will not return to 2022 levels until 2026, they said.
Welsh Government plans to restrict second homes and holiday lets in Wales could also have an impact on bringing down house prices in some communities where they are out of reach of those living permanently in those areas.
From April 1 councils will be able to charge a maximum premium of 300% on top of the standard rate of council tax on second homes.
The number of days holiday homes will need to be rented out to avoid being classed as second homes will also be nearly trebled.
Announcing the changes last month, Rebecca Evans, Minister for Finance and Local Government, said the move was intended to strike a balance between the needs of communities with large numbers of second homes and holiday lets as part of a sustainable tourism sector.
“These changes will give more flexibility to local authorities and will ensure that the contribution property owners make to the communities where they have homes or run businesses is fair,” she said.
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