New-build homes cost more than nine years’ wages in parts of Wales

Nation.Cymru staff

Buyers in two areas of Wales face paying more than nine times local annual wages for a new-build home, new research has found.

Conwy was found to be the least affordable of the 18 Welsh local authority areas included in the study, with a typical new-build property costing £332,995 – equivalent to 9.4 years of median gross annual pay.

Cardiff was close behind at 9.2 years, with the median new-build price of £339,998 the highest among the Welsh areas ranked in the top 10.

Swansea was third, where a typical new build costs £315,995, equivalent to 8.64 years of local earnings.

The research, carried out by building warranty firm Buildsafe, compared new-build property prices with median gross annual earnings for full-time employees.

Across the 18 Welsh council areas for which data was included, the average median new-build price was £289,129 and average median annual pay was £36,578. The average of the individual affordability ratios was 7.91 years of earnings.

Wages

The figures suggest that high house prices alone do not necessarily determine where new homes are least affordable.

Denbighshire was fourth in the Welsh ranking despite its median new-build price of £279,995 being below the Welsh average.

Median annual earnings in the area were £32,691 – more than 10% below the average – meaning a typical new-build home was equivalent to 8.56 years of pay.

Wrexham followed at 8.51 years, ahead of the Vale of Glamorgan at 8.49, Newport at 8.21 and Monmouthshire at 8.19.

Rhondda Cynon Taf was ninth at 8.01 years, while Caerphilly completed the top 10 at 7.92 years.

Monmouthshire had some of the most expensive new-build homes in the study, with a median price of £339,998, but also had the highest median earnings among the Welsh top 10 at £41,529.

Most affordable

At the other end of the ranking, Pembrokeshire was found to be the most affordable of the Welsh areas studied.

Its median new-build price was £239,999, equivalent to 6.59 years of median local pay of £36,438.

Neath Port Talbot was only fractionally behind at 6.6 years, with a median new-build price of £239,995, while Carmarthenshire recorded a ratio of 6.68 years.

Buildsafe chief executive Giles Fallan said: “What the Welsh results show particularly well is why looking at house prices alone doesn’t give buyers the full picture. Conwy doesn’t have the highest new-build price in Wales, but the combination of above-average prices and below-average local wages makes it the least affordable area in the Welsh ranking.

“Denbighshire is another interesting example. New-build prices there are actually below the Welsh average, but local salaries are considerably lower too. That means buyers can still face a bigger affordability gap than in areas where properties look more expensive at first glance.

“On the other hand, Monmouthshire has some of the highest new-build prices in the Welsh data, but it also has the highest median earnings in the top 10. Higher wages don’t completely cancel out those property prices, but they do make the gap considerably smaller than you might expect from looking at the asking price alone.”

Research

Mr Fallan said buyers should also consider costs beyond the initial purchase price, including service charges and maintenance costs, as well as the protection provided by structural warranties.

He added that snagging and cosmetic defects may need to be raised separately with developers.

Buildsafe used HM Land Registry Price Paid Data for new-build property prices and earnings figures from the Office for National Statistics Annual Survey of Hours and Earnings.

The median new-build price in each area was divided by median gross annual pay for full-time employees to calculate the number of years of local earnings represented by the typical property price.

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