Senedd candidate calls on government to act on ‘housing emergency’ as prices rocket in Gwynedd

A Senedd candidate has called on the Welsh Government to act on the “housing emergency” following the news of prices rocketing 14 per cent in Gwynedd.

Mabon ap Gwynfor, who is standing for Plaid Cymru in Dwyfor Meirionnydd, has described the figures as “scary”, because the market “is out of the reach of local people”.

In Gwynedd the price of detached homes increased from an average £250,000 in the previous quarter to £280,000.

It is the area with the highest increase in average house prices, which rose by 14.6 per cent.

The startling figures were released from Principality Building Society’s Wales House Price Index for Q3 2020 for July to September. These figures include one home that was sold for a whopping £1.2m.

In response to the figures, Mr ap Gwynfor has called on the Welsh Government to bring in regulations so that people have to apply for permission to change a property to a holiday home, to reduce the number of holiday homes and short term lets in any given community to a sustainable figure of around 20 per cent, and to look at significantly increasing the tax on buying holiday homes.

The Welsh Government has previously said it recognised the challenges around second homes and was monitoring the law closely.

‘Out of reach’

Mr ap Gwynfor said: “It’s scary isn’t it – that’s the average price for Gwynedd, but we know within Gwynedd that there are areas like Abersoch, Aberdyfi, Criccieth, seaside areas, where the average price is even higher.

“When you consider that in Dwyfor Meirionnydd the average income is £21,000 for a fulltime job, no one local is going to be able to afford that kind of price for a house.

“The market as it is, is out of the reach of local people, which forces local people to very often work more than one job, or to move out of the area.

“Therefore the fact that the Welsh Government is refusing to do anything about this, is refusing to acknowledge that it is an emergency, and is refusing to act, forces people into poverty, or forces people to move out of the area, very often against their will.

“We need to wait to see the latest from the Land Transaction Tax, from the Welsh Government’s sale statistics to see what the nature of these sales are. But certainly the last one to be released, I think back in September, showed that for example in Dwyfor Meirionnydd, that 45 per cent of the houses sold there were second homes, summer homes, or were buy to let houses.

“Therefore, obviously we know where the challenge. The government needs to look at increasing the tax on buying holiday homes significantly higher than it is at the moment.

“They need to bring in new planning rules to make it so that people need permission to buy a and change it to a holiday home.

“We need to reduce the number of houses that are short term lets and holiday homes in any one community to a sustainable number. It’s Switzerland it’s 20 per cent. I would say that’s pretty close to what we should have.”

‘Surge’ 

House prices have reach record levels in six Welsh local authorities according to the report. The surge in property sales following the end of the first lockdown in June has pushed the average house price up 3 per cent annually in Wales to £196,165.

The five other local authorities where average house prices reached record levels are Bridgend (£190,948), Cardiff (£247,030), Carmarthenshire (£172,708), Newport (£213,660) and Powys (£222,992).

With the exception of Cardiff, these areas are all included in the top 11 local authorities in Wales with the highest proportion of detached or semi-detached homes, which would indicate they are likely to appeal to buyers looking for more spacious homes suited to lockdown living.

Mike Jones, Chief Risk Officer at Principality Building Society, said: “Although it might appear to be somewhat implausible to be reporting rising prices in the middle of a pandemic, we believe this reflects the increase in demand following the Q2 lockdown.

“It is also potentially the desire for a lifestyle change for some who during lockdown have realised that it is possible to work from home, avoiding the necessity to travel to work on a daily basis.

“The demand for larger homes with additional space, including outdoor areas, has consequently risen however, and with little new supply coming to the market, prices also rose rapidly.

“In terms of outlook for the market, the extension of the furlough scheme and mortgage payment deferral scheme could, in the short term, help offset the impact of weakening economic performance.

“However, many experts continue to forecast a rise in unemployment during the coming months and that will inevitably impact consumer confidence and the housing market.”

‘Tax’

The Welsh Government said: “We recognise the challenges second and empty homes can present to the supply of affordable housing in some communities in Wales.

“We’re on target to deliver 20,000 new affordable homes this Senedd term, and Wales remains the only UK nation to have given local authorities powers to charge higher levels of council tax on both long-term empty and second homes.

“Our land transaction tax also includes an additional 3% charge for second home and buy to let purchases in Wales, and we recently changed our eligibility criteria for business support for self-catering properties.”