Welsh housing market shows mixed signals as 2026 begins

Recent data from property indices and official Welsh figures suggest the Welsh housing market is experiencing modest price stability and uneven activity as it enters 2026, with market observers pointing to both opportunities and continuing challenges for buyers and sellers.

According to the Halifax house price index, average property values in Wales rose modestly on an annual basis into early 2026, even while UK-wide price growth cooled and the typical UK house price dipped in December 2025.

Zoopla data also highlights two Welsh locations – Cardiff and Newport – among areas with the strongest prospects for house price activity in 2026, driven by local demand and relatively quick sales in these postcodes.

However, broader metrics indicate the picture is mixed: while headline figures show resilience, many markets are adjusting to affordability pressures and ongoing stock shortages.

The Senedd has scheduled debates on the future of Land Transaction Tax (LTT), with calls from some Members to abolish the levy on primary homes amid concerns over its impact on market fluidity. LTT, which replaced Stamp Duty in Wales and generates significant revenue, remains a political flashpoint as policymakers weigh its role in stimulating or dampening activity.

Property tax specialists note that Wales’s higher residential LTT rates on second homes and additional properties have influenced buyer behaviour, though buyers and conveyancers do not always take full advantage of reliefs that could reduce tax burdens.

Supply constraints

Long-term housing supply challenges remain a critical backdrop. Industry reports show housing delivery in Wales continues to lag, with new build completions among the lowest in recent years and a growing backlog relative to national planning ambitions.

Reduced supply is particularly noteworthy in areas where planning consents and starts have dipped, potentially reinforcing competition among buyers for existing stock.

Changing buyer and seller dynamics

Swansea-area agency No.86 Estate Agency, a boutique residential sales specialist serving Swansea and surrounding communities, says market behaviour is evolving as affordability and regional trends shape decisions.

Staff at the agency describe a shift toward more deliberate buyer behaviour and disciplined pricing by sellers, noting that homes priced in line with current market conditions are moving more quickly than those listed based on historic peak valuations.

This local insight aligns with wider data showing that steady activity in some Welsh markets coexists with ongoing affordability concerns and selective demand.

Taken together, the latest figures and market commentary suggest Wales is entering a transitional phase in its housing market with prices stable or slightly rising in key areas even as UK-wide growth cools.

Tax debates in the Senedd could influence buyer costs and transaction volumes depending on future LTT policy, while supply constraints and delivery backlogs may reinforce competition for available homes.

Experts caution that while headline data points to resilience, the market remains uneven, with stronger performance concentrated in certain urban and commuter locations.