House prices fall for 15 months in Wales - now transactions down too

The average price of a home in Wales fell to £229,263 in the first quarter of 2024, making this the fifth consecutive quarter that prices have fallen in Wales and brings the average house price almost £20,000 below its peak of £249,000 at the end of 2022.

The figures have been released by the Principality Building Society for Q1 2024 which demonstrates the rise and fall in house prices in each of the 22 local authorities in Wales.

Principality’s report shows the average house price in Wales has fallen by 2.1% since last quarter and is now down 6.5% when compared to the same period the previous year.

Although nominal prices remain 23% higher than five years ago, this broadly matches the rise in consumer prices over the period, meaning that property prices in real terms are back to where they were in at the start of 2019.

Shaun Middleton, head of distribution at Principality Building Society, says: “The downward trend of house prices has continued for the fifth consecutive quarter in Wales. Economic pressures, coupled with the higher cost of mortgages has meant affordability continues to be a problem for many buyers, placing undoubtable pressure on the housing market in Wales.

“The picture across Wales shows that overwhelmingly local authorities have been reporting price decreases, rather than increases, translating into another year-on-year falling of house prices.”

Compared with a year earlier, only four of the 22 local authorities reported property price increases, although the majority of these increases are nominal, Flintshire bucked the trend by reporting a double digit increase of 12%.

Five local authorities – Carmarthenshire, Denbighshire, Merthyr Tydfill, Powys, and the Vale of Glamorgan - experienced double digit price falls between 10% and 16% when compared to the same period the previous year, with the Vale of Glamorgan reporting the largest fall of 15.7%.

There were just below 8,400 transactions in Wales in the first quarter of 2024, 15% fewer than the last quarter of 2023. This downward trend is reflected across the rest of the UK, with wider economic pressures facing the housing market acting as a major drag on demand and activity levels during the quarter. For Wales, quarterly sales transactions have declined continuously year-on-year since late 2021.

While all property types continue to experience weaker sales, detached properties are now the furthest from their peak in relative terms, demonstrating a fall in demand for, as well as the prices of, larger properties.

Middleton continues: “Despite what has marked the most challenging housing market conditions since the Global Financial Crisis in 2008, the latest news that inflation continues to fall - although slower than anticipated - suggests that the housing market in Wales could soon see more positive signs. Many economic analysts have also predicted that the Bank of England base rate has peaked at 5.25 and will fall this year. This assumption is prompting better mortgage deals and easing the affordability of housing.

“Consumer confidence is also improving, along with wage growth, as pent-up demand for housing builds. Looking ahead, there may well be another fiscal event from the UK Government, but at the very least a General Election on the horizon, and a newly formed Welsh Government in Wales with a mandate to tackle affordable housing. Together with our insight, this suggests that this quarter may well represent the low point for house prices in Wales, which we expect to rise as affordability increases.”