Welsh housing market continues to set records

The housing market in Wales continued to set new records in the first quarter of the year as the average Welsh house price reached £212,751, the latest Wales House Price Index from Principality Building Society has revealed.

Annual house price inflation climbed to 10.1% in Q1, which was the first double-digit percentage increase since 2005.

Principality suggested that lockdown-inspired changes in housing demand as well as government policy interventions around the Land Transaction Tax (LTT) – the Welsh equivalent of the Stamp Duty Land Tax in England – have boosted prices and activity, with sales up by 40% on the same period in 2020.

The society’s index, which demonstrates the rise and fall in house prices in each of the 22 local authorities in Wales, revealed that every local authority in Wales reported a rise in house prices in the first quarter of 2021 when compared annually to Q1 2020. Eight local authorities also set new record highs during the quarter.

Principality chief financial officer, Tom Denman, commented: “The bounce back of the housing market during the pandemic has been stronger than some had anticipated, and if that momentum is maintained, it may be that the strong housing market recovery will continue through the rest of the year and into 2022.

“Pent-up demand due to a shortage of houses on the market, continuing low interest rates, wage growth for those in work, plus the incentive of the LTT, has led to this new record peak of average house prices.

“Looking further forward this growth could be impacted by the end of the LTT holiday and the furlough scheme, but much will depend on the overall recovery on the economy.”

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