Wales’ House Prices Outperform Rest of UKDate Posted: 28 January 2019
The Welsh housing market is outperforming the rest of the United Kingdom, boosted by policy and infrastructure changes which have broadened the appeal of living in the principality to a greater number of people. Whilst the rest of the United Kingdom saw a 2018 that was disrupted by the ongoing uncertainty surrounding the looming Article 50 deadline and our withdrawal from the European Union, Wales has seen houses prices reach record levels, with evidence suggesting that the market here is healthy.
According to data from Nationwide Building Society, the average house price across the United Kingdom rose by a modest 0.5% in the twelve months from December 2017 to December 2018, affected in part by a slowdown towards the end of the year as uncertainty loomed. Compare this to the 3% increase seen in Wales over the same period. The average house price in Wales is now £186,699, setting a new high.
Some regions of Wales have been standout performers, most notably in the South East of the country. Principality Building Society report that Blaenau Gwent, Caerphilly, Monmouthshire, Newport and Torfaen (collectively making the historic county of Gwent) all saw annual average house prices increases of 6% or higher. The ever-popular Vale of Glamorgan also saw a price rise of 6% whilst the employment hub of Cardiff now has an average house price of £231,065.
The success of the market, in particular the south east of Wales, can at least in part be attributed to the removal of the tolls on the Severn Bridge, connecting South Wales to the prosperous South West of England. According to Rightmove, the average house price in Bristol currently stands at over £310,000. The removal of the Severn Bridge tolls makes commuting from the south eastern counties of Wales entirely feasible for Bristol workers. The price differential between the two areas has already begun attracting purchasers across the River Severn, a trend that is likely to continue as the railways connecting Cardiff and Newport to Bristol receive the much anticipated electrification.
Another boon to the attractiveness of the Welsh housing market was the introduction of Land Transaction Tax in April of 2018, increasing the lower threshold for tax payable by purchasers of residential property to £180,000 (markedly higher than the £125,000 Stamp Duty Land Tax threshold payable in England).
It is inevitable that 2019 will be defined by Brexit, amongst other factors such as the Bank of England Base Rate of Interest, which remains close to its all time low. However, 2018 has shown that the residential property market in Wales is resilient and property here will remain appealing (and affordable) to purchasers from the south-west of England, increasing demand.
Founded in 1926, Herbert R Thomas is one of the largest independent firms of chartered surveyors in Wales. From their offices in Cardiff city centre, Cowbridge, Bridgend and Neath, we are able to provide expert guidance on a wide array of property matters and would be delighted to hear from you.