The Society’s latest house price survey (to the end of March 2004) shows that the average house in Wales has increased in value during the last 12 months from £87,238 to £115,287. This means an average house is now worth the equivalent of more than five times the average annual earnings in Wales of £21,398*. Therefore, someone buying a home on a typical mortgage multiple of 3.5 times income would now need to find a deposit of £40,394. For this reason, the average first time buyer is now in their thirties before they get on the housing ladder.
Principality Chief Executive, Peter Griffiths, said: “Contrary to predictions, property prices have continued to soar across Wales. As a mutual building society we are concerned that people are finding it increasingly difficult to get onto the housing ladder and recognise the problems faced by first time buyers and people living in rural Wales in particular. Across Wales, and especially in rural areas, houses have traditionally been affordable compared to earnings – this is no longer the case.
Peter Griffiths added: “Whilst there is evidence of a slight slowing down of the growth in prices in our capital city, Cardiff, we believe that house prices across Wales will continue to increase throughout the year at a higher rate than other parts of the UK.
“The overriding reasons for this continued increase in Wales are the low cost and availability of mortgages, the high demand and low availability of housing, together with reasonable levels of job security. Segments of the Swansea and Bangor markets remain exceedingly strong and we continue to see high demand for properties in these areas.”
Highlights of the Principality figures include:
An all-Wales average increase in 12 months from £87,238 to £115,287 (+32.2%). The average at the end of December 2003, stood at £105,538;
A North Wales increase during the same period from £78,797 to £105,248 (+33.6%);
A Mid Wales increase from, £89,613 to £117,954 (+31.6%);
A West Wales increase from £74,019 to £97,229 (+31.4%);
A South East Wales increase from £96,354 to £123,431 (+28.1%).
The average cost of a home in Swansea has risen to £114,029 in the last year, up an astounding 42.9% on the previous figure of £79,807 while prices in Cardiff have risen by an average of 27.1% to £151,038 (compared to an average increase of 30.4% in December 2003), in Newport by 37.4% to £115,371, in Wrexham by 35.9% to £107,629 and in Bangor by 41.4% to £101,312.
Peter Alan Ltd., the Principality’s estate agent subsidiary, is witnessing a very buoyant market with large volumes of sales across the South Wales area. During the first quarter of this year, sales were up by almost 25 per cent compared to the same period in 2003. However, the number of properties available on the market is decreasing and whilst Peter Alan maintains a strong market share, it confirms the ongoing shortage of supply which is contributing towards the strong house price inflation.
Peter Griffiths concluded: “Although interest rates are expected to rise in May, followed by further increases throughout the year, they will still be low in real terms. However, this does not help those who cannot get onto the housing ladder due to inflated prices and we have therefore recognised the likely increase in demand for social housing and the need to work with the National Assembly for Wales to find creative ways of addressing this.”
