The latest Wales House Price Index from LSL and Acadametrics also shows that transactions increased by 1% in December 2011 compared to November.
Richard Sexton, director of e.surv chartered surveyors, said: “Wales’ housing market is almost in a league of its own in Great Britain, bucking the wider trend of gradual house price decline seen in England and Scotland in 2011. In fact, outside of Wales, only London homeowners also saw their houses rise in value last year.
“But it wasn’t just prices that showed a positive trend at the end of the year – transactions did so too. In December, we already began to see an increase from first-time buyers who had suitable deposits and were looking to buy upper-end properties before the end of the stamp duty holiday in March. This added activity has helped boost transactions, and is likely to continue to filter through into spring activity levels.
“While the re-imposition of stamp duty has been an added incentive for many to move quickly, it is unlikely to deter first-timers in the medium-term. With much lower average house prices than in many other regions in the UK, the majority of first-time buyer properties are likely to fall under the £125,000 threshold and, therefore, to still be exempt.
“In fact, it is the inaccessibility of mortgage finance for the average buyer that is reining in demand. A combination of strong rents and growing inflation is limiting the amount first-timer buyers can set aside to meet the hefty deposit requirements imposed by lenders.
“Wealthy investors and retirees have been the bedrock of the Welsh housing market in the past year, being able to take advantage of historically low yet increasing house prices, combined with incredibly affordable mortgage rates for those who have enough equity to qualify. With the lending picture unlikely to drastically change, wealthier buyers will continue to have a disproportionately large impact on the market and house prices as the year progresses.”
