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Welsh house prices at 2010 levels

paulajohn
Written By:
paulajohn
Posted:
Updated:
22/05/2013

Average property prices in Wales have fallen back to 2010 levels, according to the LSL House Price Index.

Property prices in Wales are falling, losing £284 in March alone.

According to property services giant LSL, the reverse in values is due mainly to a lack of demand caused by a shortage of higher loan-to-value mortgages in the principality.

The average price of a house in Wales now stands at £151,780.

Richard Sexton, director of e.surv, the surveying arm of LSL, said: “The Welsh housing market is being dragged back by a lack of mortgages available to buyers with small deposits.

“Prices just haven’t taken off and have fallen back to their December 2010 levels – a -2.7% fall over three years.

“The crux of the problem is a lack of mortgages. Welsh first time buyers are finding it tough to secure a mortgage at a decent rate and many first-time buyers are being locked out of the market entirely so are having to stay in expensive rental accommodation.

“As a result house sales are low, especially at the bottom end of the market. This has stifled activity higher up the property ladder making the whole chain sluggish.”

There is a glimmer of positivity, with new buyer enquiries now slightly higher than the three-month average, and new sales instructions up 25%.

Sexton said: “Demand is high as people are desperate to buy and escape the expensive private rental sector but they are thwarted by strict mortgage requirements.

“In local terms the rate of growth in house prices is closely tied to the performance of each region’s economy. Some areas are more exposed to public sector austerity, inflation, a lack of private sector investment and unemployment which suppresses house prices.”

In March house prices fell in 15 of the 22 unitary authorities. Sales in the south of the country are more than double that of the north.

Sexton added: “The weakness of the Welsh economy means the government is right in trying to give the housing market a shot in the arm.

“New initiatives geared to boost the first-time market – like the Help to Buy scheme – should offset some of these chronic weaknesses. The signs for 2013 are more positive.

“As mortgage rates drop and the range of mortgage deals improve, there is much hope that the housing market will make some great strides towards recovery this year and we are beginning to see this occur elsewhere in the UK.

“Traditionally Wales lags the rest of the UK but if the Country holds true to previous performance we should now begin to see the green shoots emerge from the Green Green Grass of Wales in the near future.”


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