Jump in houses in Wales selling for considerably lower than the asking price
There has been a jump in Wales in the percentage of houses selling for considerably lower than the asking price, as the end of the pandemic, rising interest rates and cost of living crisis put the brakes on the overheating market.
The share of homes selling with 5% discounts in Wales jumped to 6.5% in July 2022, compared to 4.7% in the same period last year, according to Zoopla.
The pandemic saw a race for space as workers headed out of urban areas to rural areas in the hope of being able to work from home in a more desirable area.
However, over the past few months, workers have returned to the office in increasing numbers and rising inflation and fears of a recession have combined to slow sales. That has in turn led to an increasing supply of properties available in Wales.
Zoopla said that they expected the headwinds facing the property market to increase as the end of the year approached.
Inflation soared to a new 40-year high of 10.1% in July, making it likely the Bank’s Monetary Policy Committee will increase interest rates again when it meets on 15 September.
However, Zoopla have said that they do not expect to see housing prices crash in the near term.
“House prices tend to fall when they get too high and out of kilter with incomes,” says Richard Donnell, Executive Director of Research and Insight at Zoopla.
“In the past, this has gone hand in hand with more relaxed mortgage lending. The difference now is that there are much tougher rules to get a mortgage.
“In short, we don’t have the scale of over-valuation of housing that we’ve seen before.
“This puts the market in a much better position to weather high mortgage rates and the increased cost of living.
“The housing market is not immune from these pressures and some will already be feeling the squeeze. But the likelihood of big price falls is much lower than in the past.”
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