A building society has indicated that the UK Labour government’s new housing proposals, along with a regional plan to develop 20,000 low-carbon homes for rent, could mark the beginning of a “new dawn” for the housing market in the latter part of 2024.
The Principality Building Society highlighted this potential shift following its latest report. According to their data, the average price of a home in Wales has risen to £236,369 in the second quarter of 2024. This increase in prices is notable as it represents the first rise since December 2022, suggesting a possible recovery or change in market trends.
A spokesperson commented, “This recent increase in housing prices marks a significant turnaround and suggests that the market may be stabilising. It is noteworthy as it follows a prolonged period of challenges. In recent years, the housing market has faced the most difficult conditions since the Global Financial Crisis of 2008. According to the Building Societies Association, first-time buyers have encountered the toughest market conditions in nearly 70 years.”
The spokesperson highlighted that this development could signal a shift in market trends, potentially offering some relief to buyers and sellers alike. The challenging market conditions over the past few years have significantly impacted many, making it a critical period for both new and existing buyers.
Looking ahead, the new UK Labour Government is advancing with substantial legislative changes aimed at addressing the housing crisis. Their plans include accelerating the development of infrastructure and constructing 1.5 million new homes across England. This initiative is part of a broader strategy to improve housing availability and affordability in the country.
In addition, the Welsh Government has committed to its own housing goals. It has pledged to deliver 20,000 new low-carbon homes for rent within the social sector during the current term. This commitment reflects a concerted effort to address housing needs while also focusing on environmental sustainability.
The spokesperson noted, “Our latest insights indicate that the second quarter might signal a significant shift in the housing market for Wales. We anticipate an increase in house prices, along with a rise in the number of transactions. This positive outlook is attributed to several factors, including improved economic conditions, enhanced affordability, and growing buyer interest. If these trends persist, they could contribute to a more stable and optimistic market scenario in the coming months.”
The Principality Building Society’s recent housing market figures provide a comprehensive overview of price movements across Wales. The report tracks changes in house prices across all 22 local authorities in the region. According to the data, fifteen of these authorities reported price increases compared to the previous quarter, reflecting a general upward trend.
Among these areas, Bridgend and Ceredigion stood out with particularly notable increases. Both regions experienced double-digit price rises, with increases exceeding 16%. This significant growth in certain areas underscores the regional disparities within the Welsh housing market and highlights the varying impacts of current market conditions.
The latest figures suggest a promising recovery and stabilisation in the housing market. With the anticipated improvement in economic factors and continued buyer interest, the housing market in Wales may be on the path to recovery, potentially reversing the trends seen in recent challenging years.
Year-on-year, 11 local authorities in Wales have reported a decrease in house prices, with Wrexham experiencing the most significant drop. Prices in Wrexham fell by 10% compared to the same period last year. This decline reflects broader trends affecting various regions, where some areas continue to struggle with falling property values.
Despite these declines, the second quarter of 2024 has seen a notable increase in property transactions across Wales. There were 10,200 transactions during this period, which is a 24% rise compared to the first quarter of 2024. This increase in activity signals a possible rebound in the housing market after a prolonged period of decreasing transaction volumes.
Moreover, the 10,200 transactions in the second quarter also represent a 16% increase from the same quarter the previous year. This growth is significant as it suggests a positive shift in market dynamics, particularly after a trend of declining quarterly transactions since late 2021.
While some local authorities continue to face challenges with falling prices, the rise in transaction numbers could indicate a broader recovery in the housing market. The recent increase in transactions may be a sign that the market is beginning to stabilize and show signs of growth after a period of decline.