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Parts of Wales set to see biggest house price crash across the UK, data suggests

12 Oct 2022 3 minute read
Picture by Cymdeithas yr Iaith

Parts of Wales are set to see the biggest house price crashes across the nations of the UK over the next few months, new data has suggested.

Demand in both West Glamorgan and the Vale of Clwyd both fell -15.4% last month, the most across the whole UK, according to PropCast, a data company.

Meanwhile, demand in South Glamorgan fell 14.1%. Only Cornwall saw a similar fall in demand, with 14.5% less demand from buyers.

The figures are based on figures based on agreed sales as share of listed properties for sale.

The data showed that rural and coastal holiday areas recorded the biggest falls in demand, as the Covid demand for ‘staycation’ properties and less crowded areas outside of cities came to an end.

The housing market also faces headwinds from rising inflation and mortgage interest rates.

Demand is set to plummet further after Britain’s economy unexpectedly shrank in August, reinforcing forecasts that the UK is on course for a recession as the cost-of-living crisis hits hard.

‘Exposed’

The proportion of households struggling to make their mortgage payments is expected to increase to its pre-financial crisis peak by the end of next year, the Bank of England has warned.

The Bank’s Financial Policy Committee (FPC) said today that households with high cost of living-adjusted mortgage debt-servicing ratios will soar if interest rates increase in line with what the market expects.

The category measures those who spend more than 70% of their take-home pay on mortgages and other essentials.

These households will struggle to meet their payments and will have to cut spending, and could default on their loans.

“Assuming rates follow this market-implied path, the share of households with high cost of living-adjusted mortgage debt-servicing ratios would increase by end-2023 to around the peak levels reached ahead of the global financial crisis (GFC),” the Bank said.

“However, households are in a stronger position than in the run-up to the GFC, so UK banks are less exposed to household vulnerabilities.”

There are fewer households with mortgages than at the time of the GFC and the ratio of debt to income of British households is well below where it peaked before the 2008 crash.

“Nevertheless, it will be challenging for some households to manage the projected rises in the cost of essentials alongside higher interest rates,” the Bank said.

It came as the Bank warned that the outlook for the global economy has deteriorated significantly in recent months.

The Bank said recent problems in the market for UK Government debt had spilled over and were impacting global markets.

“The global economic outlook has continued to deteriorate significantly, and by more than had been expected, while geopolitical risks have remained heightened since July,” the FPC said.

It added that interest rate increases will also push up costs for companies.


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Frank
Frank
1 month ago

House prices dropping should be good news for first time buyers in Wales but the cross border immigrants will be there first buying without viewing.

Y Tywysog Lloegr a Moscow
Y Tywysog Lloegr a Moscow
1 month ago
Reply to  Frank

One would hope that prices are crashing because the predatory landlords and second homers have gorged on our houses until they are full to bursting. Or perhaps our “second home tax” is putting them off.
GOOD!

SundanceKid
SundanceKid
1 month ago

I know many second and holiday home owners in my area who have already put properties on the market in anticipation of the increased council tax premiums.

Confused
Confused
1 month ago
Reply to  Frank

Do the immigrants have a particular skin colour or is it just generally “the English”?

Ftyfsj vfff
Ftyfsj vfff
1 month ago
Reply to  Frank

Na they will end up empty and derelict as they are in so many vallies. The only people beyond clawdd offa who want to buy in Wales are the millions of Welsh who could not find work in Wales and made lives for themselves in England a few suffer hiraethin old age..

hdavies15
hdavies15
1 month ago

Careful what you (or we) wish for. Despite the high profile of second/holiday homes, the buy to lets, the airbnb’s, and the influx of relatively wealthy white flights from beyond Clawdd Offa, the majority of house purchase remain those of first time buyers and a mix of people moving due to job change, family reasons etc. This is the segment of the market that will get a caning now if not on a fixed deal and later when any fixed deal comes up for renewal. They have gone in at interest rates maybe 2-3% and are now looking c.6% with… Read more »

Notttabottt
Notttabottt
1 month ago

Wales online spewing right now

Ihumphrys
Ihumphrys
1 month ago

Welsh Gov.must get in there first, then let to buy.
What am I saying? They have as much get up and go as Let’s Go- Brandon.
Now, if it was diversity or feeding our kids grasshoppers………………..

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