House prices in Wales remained steady during the second quarter of 2020 despite the coronavirus pandemic, with the average house price reaching £191,880.
New figures, released from Principality Building Society’s latest Wales House Price Index, revealed that the new average house price for Wales represented a 2.2% annual rise, but a quarterly drop of 0.7%.
Principality suggested the number of purchases is lower than normal due to lockdown measures that were in place. Transactions were also down by 66% in Q2, in which the housing market was temporarily frozen.
The society highlighted that Wales had begun 2020 with a record average house price of £193,299 in January. While lockdown started in March, where the average house price had dipped marginally to £193,257, Principality suggested that most decisions to purchase properties in that month would have been taken before the extent of the pandemic was known – meaning prices would have been “relatively unaffected” by the COVID-19 pandemic until April.
“We remain cautious about how we interpret average house price data for Q2 because sales are down by more than 60% compared with the same period in 2019,” Principality interim CEO, Mike Jones, commented.
The society’s index also anticipated that average prices in Wales will continue to rise in Q3, following the increase in the Land Transaction Tax threshold from £180,000 to £250,000. This change took effect from 27 July, although the savings do not apply to those buying a second home or buy-to-let property.
Jones added: “The temporary increase in the Land Transaction Tax to help first-time buyers in particular, is likely to stimulate the market in the short-term, along with increased levels of activity following the easing of lockdown restrictions.
“However, once the UK Government furlough schemes come to an end in October, there may well be a rise in job losses and this, in turn, is likely to have a negative impact on consumer confidence in general. If this happens, then we would expect to see lower levels of activity in the housing market across the UK, and not just Wales.”
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