Wales’ property prices continue to surge despite cost of living crisis, defying prediction of a slowdown
Wales’ property prices continued to surge in June, defying predictions of a slowdown due to the cost of living crisis and a looming recession.
House prices in Wales continued to record a strong rate of annual growth, with prices increasing by 14.3% year on year to a new record average of £219,281.
Only Northern Ireland saw a bigger rises in property prices year on year, at 15.2%.
Across the UK property prices were up by 13.0% annually, marking the highest growth rate on this measure since late 2004, Halifax said. They also saw their biggest one month rise since 2007, to reach a record £294,845 on average.
There had been dire predictions for Wales’ housing market in the spring with estate agents predicting that growth would quickly slow.
One real estate agency in Monmouth, Roscoe Rogers & Knight, warned in May that prices were “on the edge of a precipice” and “not sustainable” as the market saw a surge in new properties listed by customers eager to sell before any economic turn.
Slowing of house price growth should still be expected in the months ahead, Halifax said.
Russell Galley, managing director, Halifax, said: “The UK housing market defied any expectations of a slowdown, with average property prices up 1.8% in June, the biggest monthly rise since early 2007.
“This means house prices have now risen every month over the last year, and are up by 6.8% or £18,849 in cash terms so far in 2022, pushing the typical UK house price to another record high of £294,845.
“The supply-demand imbalance continues to be the reason house prices are rising so sharply.
“Demand is still strong – though activity levels have slowed to be in line with pre-Covid averages – while the stock of available properties for sale remains extremely low.”
Halifax however said that property prices had so far appeared to have been largely insulated from the cost-of-living squeeze.
“This is partly because, right now, the rise in the cost of living is being felt most by people on lower incomes, who are typically less active in buying and selling houses,” Russell Galley said.
“In contrast, higher earners are likely to be able to use extra funds saved during the pandemic, with latest industry data showing that mortgage lending has increased by the highest amount since last September.
“Of course, the housing market will not remain immune from the challenging economic environment.
“But for now it continues to demonstrate – as it has done over the last couple of years – the unique combination of factors impacting prices.
“One of these remains the huge shift in demand towards bigger properties, with average prices for detached houses rising by almost twice the rate of flats over the past year (13.9% versus 7.6%).
“In time though, increased pressure on household budgets from inflation and higher interest rates should weigh more heavily on the housing market, given the impact this has on affordability.”
He added: “So while it may come later than previously anticipated, a slowing of house price growth should still be expected in the months ahead.”
Average House Prices
Here are average house prices in June and the annual increase, according to Halifax:
– East Midlands, £241,875, 12.6%
– Eastern England, £341,544, 12.4%
– London, £547,031, 7.1%
– North East, £169,760, 11.0%
– North West, £224,941, 12.0%
– Northern Ireland, £187,833, 15.2%
– Scotland, £201,549, 9.9%
– South East, £396,173, 11.9%
– South West, £308,128, 14.2%
– Wales, £219,281, 14.3%
– West Midlands, £247,130, 11.5%
– Yorkshire and the Humber, £203,630, 10.3%
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