Housing crisis: Wales records steepest property price growth across the UK once more
Wales has once again recorded the steepest house price growth across the nations and regions of the UK over the year to May.
Prices rose by 14.4% in Wales, according to the Office for National Statistics.
That compared to 13.1% in England, 11.2% in Scotland and 10.4% in Northern Ireland.
It means that the average home in Wales at £212,000 is now significantly more expensive than Scotland at £188,000 and Northern Ireland at £165,000.
House prices continue to surge despite an expected taper as the cost of living crisis and a possible recession hit demand.
Jamie Durham, of PwC accountants, said: “Over the coming quarters we expect the market to slow as cost of living pressures bite.
“Rising inflation, increasing interest rates and the risk of recession have dampened consumer confidence.”
House prices have surged since April 2020 as the pandemic led to a race for space outside of large cities, with a rise in working from home.
London continues to be the region of England with the lowest annual growth at 8.2%.
Despite being the region with the lowest annual growth, London’s average house prices remain the most expensive of any region in the UK, with an average price of £526,000 in May 2022.
The North East continued to have the lowest average house price at £154,000.
Hargreaves Lansdown however have said that the “desperate dash for property at a time of rocketing prices may be over”.
“The question is whether we will see prices slow to a crawl, stagnate, or start to drop if we see a recession,” Sarah Coles, senior personal finance analyst, said.
“An awful lot depends on things we don’t yet know – including how high interest rates will go, how deep any recession might be, the impact it could have on jobs, and whether this is serious enough to cause real damage to the property market.
“Buyers have time to consider whether this is a move they can really afford, and whether they’ll still be happy they made it if prices pull back later in the year.”
2023 is expected to see the Welsh Government take action, as part of a cooperation deal with Plaid Cymru, to try and reduce the number of holiday homes in Welsh communities.
They confirmed earlier this year that they would carry on with plans for tax hikes on holiday lets that do not rent out their properties for more than half the year.
Following a consultation, from April local authorities will be able to set council tax premiums on second homes and long-term empty properties to 300% from April 2023.
The criteria for self-catering accommodation being liable for business rates instead of council tax will also change at the same time, from 70 to 182 days. This will stop second home owners from classifying homes as businesses because they are let out for one fifth of the year.
“As part of the Co-operation Agreement with Plaid Cymru, we are committed to taking immediate action to address the impact of second homes and unaffordable housing in communities across Wales, using the planning, property and taxation systems,” Economy Minister Rebecca Evans said.
“As we continue to progress the package of measures and drawing on the latest evidence base, we will keep under constant review the whole range of levers available to use and how they may be deployed most effectively to meet our policy objectives and avoid any unintended consequences.”
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