The average price of a house in Wales in February, at £151,986, is practically unchanged, according to the latest LSL Property Services/Academetrics Welsh House Price Survey.
By remaining unchanged, however, February saw an end to three prior months (November 2011 to January 2012) of successive price falls, totalling a negative 2.0% loss, over the winter months.
Although the Principality, as a whole, saw no change in prices in February, it was a different story at local level. Whilst Wrexham prices rose 2.2% in the month, mainly due to a rise in the average value of semi-detached properties, Carmarthenshire witnessed a &minus2.6% fall.
Over 12 months, the average price of a house in Wales was &minus0.6% lower in February 2012 than in February 2011. As with monthly prices, this result at Principality level masks considerable variation, locally, from the &minus10.2% fall in Merthyr Tydfil to the +11.2% rise in nearby Blaenau Gwent, year on year.
Richard Sexton, director of e.surv, part of LSL Property Services, said: “The average Welsh homeowner has seen £1,710 wiped off the value of their property since December. Prices have fallen in nine of the last 12 months with fiscal austerity and a weak jobs market hitting house prices like a ton of bricks.
“The only people sustaining the housing market are the elderly and the wealthy. The first time buyer market has withered away. These older buyers are the only ones in a position to take advantage of record low mortgage rates, as they have been able to use the equity from their homes to secure cheap deals. This has created a two-tier market and disproportionate reliance on wealthier borrowers.
“While the high end of the market sees a steady flow of activity, the bottom end is in gridlock. Affordable rates are of little consolation to first time buyers who can’t raise the big deposits demanded by banks and building societies. This is suppressing activity and dragging down prices. First time buyer numbers could drop away even further now the stamp duty holiday has passed. What’s more, the cost of funding mortgages is increasing for banks, which will force them to scale back their lending to buyers with small deposits over the spring and early summer.
“Apart from the nation’s recent Grand Slam victory, the only bright spot is over the very long-term, where Welsh house prices have been considerably more buoyant than their Scottish and English counterparts. Wales and London are the only parts of the UK where prices have increased over the past 12 months. On top of that, Wales has seen the highest price rises over the last decade out of any region in the UK.
“And prices have risen in some areas, where spending cuts and the troubled jobs market don’t seem to have affected the local property market. As a result, banks and building societies are more willing to lend to borrowers in these areas.”