House prices in Wales remained steady in Q2 2020 despite the coronavirus pandemic, with the average house price recorded at £191,880 according to figures from Principality Building Society.
Principality’s latest House Price Index records the difference in house prices in each of the 22 local authorities in Wales.
The average house price represents a 2.2% annual rise but a quarterly drop of 0.7%, although the number of purchases is lower than normal due to lockdown measures that were in place. Transactions were down by two thirds (66%) in Q2 in which the housing market was temporarily frozen.
Wales began 2020 with an average house price of £193,299 in January. Although the lockdown started in March, most decisions to purchase properties in that month would have been taken before the extent of the pandemic was known according to the index. Prices would therefore have been relatively unaffected by the pandemic until April.
Mike Jones, interim chief executive at Principality Building Society, said: “We remain cautious about how we interpret average house price data for Q2 because sales are down by more than 60% compared with the same period in 2019.
“The temporary increase in the Land Transaction Tax to help first time buyers in particular, is likely to stimulate the market in the short-term, along with increased levels of activity following the easing of lockdown restrictions.
“However, once the UK Government furlough schemes come to an end in October, there may well be a rise in job losses and this, in turn, is likely to have a negative impact on consumer confidence in general. If this happens, then we would expect to see lower levels of activity in the housing market across the UK, and not just Wales.”
Most property observers are anticipating that average prices in Wales will continue to rise in Q3, following the increase in the Land Transaction Tax threshold from £180,000 to £250,000, which took effect from 27 July. The savings do not apply to those buying a second home or buy-to-let property.
Seven local authorities in Wales saw house prices rise during Q2, predominantly in the south of the country, with the Vale of Glamorgan increasing at the highest rate by 14% to an average price of £300,903. 15 local authorities in Wales saw house prices fall during April – June 2020.
Different property types have seen varying movements in price during Q2 2020, with terraced houses increasing in value by an average 5.7% and detached properties by 3.8%. Semi-detached properties have fallen by 2.6% and flats were down by 9.0%.
This post has originally been featured in Property Wire.