Demand in first lockdown pushes Welsh house prices up 3%

A surge in property sales following the end of the first lockdown in June has pushed the average house price in Wales up by 3% annually.

Principality Building Society’s latest Wales House Price Index for Q3 2020 revealed the average Welsh house price is currently sitting at an average £196,165.

Wales also experienced growth in sale prices across the quarter by 2.2%, however Principality’s data showed that the number of property sales was down by 58% between April and September, when compared with the same period in 2019.

In September, six local authorities in Wales – Bridgend (£190,948), Cardiff (£247,030), Carmarthenshire (£172,708), Gwynedd (£198,279), Newport (£213,660) and Powys (£222,992) – reached a new record average house price.

Principality chief risk officer, Mike Jones, commented: “Although it might appear to be somewhat implausible to be reporting rising prices in the middle of a pandemic, we believe this reflects the increase in demand following the Q2 lockdown.

“In terms of outlook for the market, the extension of the furlough scheme and mortgage payment deferral scheme could, in the short-term, help offset the impact of weakening economic performance. However, many experts continue to forecast a rise in unemployment during the coming months and that will inevitably impact consumer confidence and the housing market.”

In Wales, the Land Transaction Tax (LTT) concession introduced in July moved the threshold from £180,000 up to £250,000 until 31 March 2021, worth a maximum of £2,450 to people who buy a property at this price.

Jones added: “Given the relatively low savings that can be obtained on the LTT duty in Wales, we do not consider the impact of the temporary rate will be as significant as it appears to be in England’s housing market. The temporary LTT holiday in Wales does not apply to second homes or buy-to-let properties, where an additional rate of 3% remains payable.”

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