Welsh house prices up almost £30,000 in one year amid housing crisis
House prices in Wales have surged more than the median yearly wage in one year, going up by £29,884, according to new figures by Halifax.
The average Welsh house price hit a new record high of £211,942, or a 14.1% jump on this time last year.
It comes as campaigners call for the Welsh Government to do more to control surging house prices in Wales as many are priced out of buying or renting in their own communities.
The Halifax report said the impact of the pandemic on buyer demand can be seen when looking at different property types – with homes offering more space commanding bigger premiums.
Looking across the UK, the South West of England overtook Wales as the strongest performer in terms of annual price house inflation for the first time in over a year, Halifax said.
Average house prices in the South West were up by 14.6% annually in March – the region’s highest rate of annual increase since September 2004. The average house price there was £298,162, marking a record for the region.
While this is the first time since January 2021 that Wales has not recorded the UK’s highest annual growth, house price inflation there remains extremely strong, at 14.1%.
The average house price is £211,942 which is yet another all-time high for Wales, Halifax said.
The average UK house price hit a new record high of £282,753 in March after increasing by nearly the equivalent of average earnings over the past year.
Russell Galley, managing director of Halifax, said: “The new record price of £282,753 is up some £28,113 on a year ago, not far off average UK earnings over the same period (£28,860).
“The story behind such strong house price inflation remains unchanged: limited supply and strong demand, despite the prospect of increasing pressure on households’ finances.
“Although there is some recent evidence of more homes coming on to the market, the fundamental issue remains that too many buyers are chasing too few properties.”
He said that in the long-term “we know the performance of the housing market remains inextricably linked to the health of the wider economy”.
He added: “There is no doubt that households face a significant squeeze on real earnings, and the difficulty for policymakers in needing to support the economy yet contain inflation is now even more acute because of the impact of the war in Ukraine.
“Buyers are therefore dealing with the prospect of higher interest rates and a higher cost of living. With affordability metrics already extremely stretched, these factors should lead to a slowdown in house price inflation over the next year.”
In February the Welsh Government announced that the maximum tax hike on second homes is set to be raised to a whopping 300% in an attempt to cool the housing market.
The move is to tackle the negative impact vacant houses, holiday lets and soaring property prices are having on local communities.
It is part of a series of measures set out in the Co-operation Agreement between the Welsh Government and Plaid Cymru.
Councils across Wales will be able set the premium at any level up to the maximum, from April 2023.
The maximum premium councils can charge at the moment is 100%, which means the new measure could lead to a possible tax rise of 200%.
It will be possible to apply different rates for second homes and long-term empty dwellings.
Plaid Cymru’s Lead Designated Member Sian Gwenllian MS said: “It is clear that we as a country are facing a housing crisis. So many people cannot afford to live in their local areas, and the situation has worsened during the pandemic.
“These changes will make a difference, enabling councils to respond to their local circumstances and start to close the loophole in the current law. It’s a first but important step on a journey towards a new housing system that ensures that people have the right to live in their community.”
Climate change minister Julie James said: “We want people to be able to live and work in their local communities, but we know rising house prices are putting them out of reach of many people, exacerbated by the cost-of-living crisis we are facing.
“There is no easy answer or quick-fix solution. This is a complex problem that requires a wide range of actions.
“We continue to carefully consider further measures that could be introduced, and these changes are the latest steps we are taking to increase the availability of homes and ensure a fair contribution is made.”
Here are average house prices in March and the annual increase, according to Halifax:
– East Midlands, £234,083, 12.3%
– Eastern England, £330,883, 11.7%
– London, £534,977, 5.9%
– North East, £162,692, 9.5%
– North West, £214,591, 10.8%
– Northern Ireland, £177,265, 13.0%
– Scotland, £194,621, 8.2%
– South East, £385,790, 11.6%
– South West, £298,162, 14.6%
– Wales, £211,942, 14.1%
– West Midlands, £238,647, 10.0%
– Yorkshire and Humber, £194,639, 9.5%
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House prices are massive throughout the Uk and if Sian Gwenllian and Julie James think by increasing council tax on second homes is suddenly going to make everything ok they are living in another planet to the rest of us. If young people cannot afford to buy in the areas they were born in, the solution is either to massively increase wages for people or to build social housing. Affordable houses are not affordable for most first time buyers. There however seems to be a great reluctance by the Govt and Councils to build social housing why i do not… Read more »
It’s true that holiday homes are only part of the problem. Another major element is white flight, which has been exacerbated by the desire in affluent areas of large cities to escape Covid 19. Inevitably, people in rural or semi-rural parts of Wales cannot compete with these two population groups in terms of purchasing power.
Social housing would mitigate some of the damage, but will not solve the problem of unaffordability in the private housing market. A move away from low-income tourism to a more productive local economy would help to boost incomes.
NGJ – so simple isn’t it -?? you perhaps need to look at the situation in the Lakes, Peak District and of course our Celtic cousins in Cornwall. Far worse but those in elected governance there in all parties are of one view – and it’s NOT yours my friend re tax being part of the answer…. Indeed Lakes members have recently used the Emerging Wales model themselves as part of their response to support local communities… I sat in a debate of Cornwall Council three years back when again Wales was seen as offering part of the answer. And… Read more »
Richard it certainly isnt simple but tax is not the answer- If it did manage to drive all the second home owners out of Wales – as Wrexhamian rightly points out it would just create more white flight into the areas being vaccated. One of the reasons for the current policy is to protect the Welsh langague in the areas of high holiday homes however the opposite would actually occur with more permanent non welsh speaking residents moving in full time with i might add a vote thus changing the political landscape drastically.
You’ve misinterpreted my comment; I made no such assertion. The purpose of raising tax-levels in the affected parts of Cymru is to discourage external acquisition of these properties by those with a higher disposable incomes, although obviously legislation to rein in the housing market will be necessary in order to actually put an end to it and to favour local residents, as many other countries do. This, combined with higher local taxation on such properties, will produce the desired result of safeguarding the Bro Gymraeg for local, Welsh-speaking families.
Drakeford needs to ban house price increases. He’s not doing enough. He banned parkrun but won’t ban house price increases. Also Welsh locals should he banned from selling their house to anyone outside of their village.
Wales Online is over there.
It’s the welsh people fault for still voting for English party’s in wales vote Plaid Cymru 🏴
1) The Government makes the problems with expensive and useless rules & regulations which make house building more expensive, so supply cannot keep up with demand. 2) Each household on average pays 1.14million in taxes throughout their life time (figures from tax payers Alliance) so if people stopped demanding Government interfere in the housing market and remove restrictions so more houses can be built, prices would drop. Oh and btw imagine the house you could afford if people stopped wanting Government to increase taxes & instead demanded a tax cut & for them to cut back on their spending, then… Read more »