House sales in Wales drop by 17.5%
While house prices in Wales are up 1.1% on this time last year, a new report blames the heavy rain as well as mortgage problems for a fall in house sales.
Richard Sexton, director of e.surv, part of LSL Property Services who produced the report, said a combination of a problematic mortgage market for first-time buyers and poor weather conditions had dampened housing market activity in April.
“Several parts of Wales saw twice the normal amount of rain in April,” he said, “restraining buyers’ enthusiasm for viewing properties, and this has hampered competition for properties on the market. However, the longer-term effect of the absence of thousands of first time buyers – still struggling to secure mortgage finance – continues to be felt throughout the Welsh housing market, reining in house sales and keeping prices deflated on a monthly basis. As a result, transactions fell by 17.5% – more than three times the seasonal drop we would normally anticipate.”
He added that house prices in Wales had also dropped by £400 over the last month, wealthier buyers and equity-rich retirees were still driving the top end of the market. “The buoyancy of the upper tier of the market was reflected in the regional disparity of annual house price rises. Those with the highest average prices – Monmouthshire and the Vale of Glamorgan – saw the largest increases, while Blaenau Gwent, with the lowest average price, saw the biggest fall – highlighting the two speed nature of the Welsh housing market.”
Dr Peter Williams, housing market specialist and chairman of data providers Acadametrics, co-authors of the report, said:
“It is perhaps a sobering process to remind oneself that RPI over the period from December 2005 to April 2012 has risen by 25%, so expressed in real terms house prices in Wales have fallen by between -12% and -36%. In real terms, the FTSE 100 has dropped by -24% over this period, indicating that investing in the stock market would have earned similar returns to housing, but without providing a roof over one’s head.”
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