House prices across Britain have risen at rates not seen since before the financial crisis, yet one country has outpaced all others.
Values in Wales increased by more than 13 pc in te 12 months to May this year, according to the Office or National Statistics. This was a slight drop on the significant increase of 14.2 pc recorded in April, yet still the biggest jump in the UK. Prices in England rose by 9.7 pc, Scotland by 12.1 pc and Northern Ireland 6 pc.
Wales has been affected by the familiar property market cocktail; a change in housing needs because of lockdowns and a tax break have both boosted demand, and there has been a lack of supply. But another factor is at play; a growing desire for second homes and holiday lets. Relatively affordable property has resulted in a spike in prices.
The Welsh land transaction tax holiday, the equivalent of the English stamp duty break, did not apply to second homes or buy to let purchases, in an attempt to curtail the holiday home boom. Yet the Welsh second home market still surged. With its promise of rugged coastlines, dramatic scenery and affordable property, it overtook Cornwall as Britain’s holiday home hotspot this year.
This has been a cause for concern for the Welsh government, which introduced tax changes to discourage investors and protect locals from being priced out.
They market was also boosted by relocators moving in. Many recent buyers were those with young families, who flocked to Wales from elsewhere in the UK for the promise of more space and a better quality of life.
The biggest increases in transactions were among those buying second homes and relocating to Wales for the lifestyle, said Lucien Cook of estate agency Savills. “Transaction levels are comparable to those in the most active parts of south-west England”, he said.
Agreed sales were 24 pc higher in the first half of this year than the 2019 benchmark, according to analysis of TwentyCi data by Savills. Part of the reason is property in the country is cheap in comparison with other destinations and, even faced with additional tax surcharges, investors and homebuyers remain undeterred.
The average house in south-west England is more than 50 pc more expensive than a Welsh property, with a price tag of £280,000 versus £184,000. This makes the average house price in Wales marginally higher than its nil band land transaction tax thresh hold of £180,000. Much of the market will remain exempt from the charge, said Andrew Wishart of Capital Economics, an analysis firm.
The strongest activity was seen in Torfaen, South Wales, where sales were up 71 pc in the first six months of this year when compared to the 2019 figures, and Monmouthshire, where sales rose by 66 pc. Buyers also flocked to Pembrokeshire and the coastal disctrict of Ceredigion, where sales activity increased by 51% and 49% respectively.
“Soaring demand has meant bidding wars and gazumping have become commonplace”, said Carol Peett of West Wales Property Finders, a buying agent http://www.westwalespropertyfinders.co.uk.
“In some cases buyers have neared completion only for the vendor to increase the asking price by £50,000 to £100,000”.
“The second home market has steadily increased since Brexit”, said Mrs. Peett, “but it is the number of buyers permanently relocating to Wales that has increased the most”.
“We have seen a lot of people who grew up here, but didn’t stay because of work, come back. Now working from home has become the norm they can settle here”, she added.
Mr Wishart said, Welsh house prices look even more affordable when you compare them with higher salaries from elsewhere. As hybrid working allows people to live further away from the office, there is more scope for property values to keep going up”.
Estate agents have reported that demand for properties in Wales sill far outstrip supply, despite th land transaction tax holiday ending last month. Unlike its English counterpart, the Welsh tax break has not been tapered.
Despite this, buyer inquiries in Wales rose faster than any other region in the UK last month, according to the latest survey by trade body the Royal Institution of Chartered Surveyors.
The Daily Telegraph – Saturday, 24th July 2021
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