House prices in Ceredigion fall - but still above national average

HOUSE prices are slowly dropping across most of west Wales, new quarterly figures from the Principality Building Society show.

The figures for the second quarter of 2023 show that house prices in Ceredigion have dropped four per cent, with a two per cent drop annually, with the average home now costing £260,877.

This is still £18,811 more expensive than the average home in Wales.

Gwynedd has recorded a 6.1 per cent drop in house prices this quarter, leading to a 0.4 per cent drop annually, with the average house price now standing at £226,676.

Powys has recorded the steepest drop in house prices with an 8.9 per cent drop quarterly and 8.9 per cent annually, leaving the average house price at £257,140.

Carmarthenshire saw its house prices remain the same with a 2.9 per cent drop annually and an average price of £233,872 – below the national average.

Across Wales, local authorities also continue to report a slowdown in the housing market. Principality’s House Price Index shows that for the second quarter in a row, more local authorities are reporting quarterly price falls than increases, with Cardiff being the only local authority to record a new peak price of £310,930.

There were fewer than 8,500 transactions in Wales in Q2, a modest 5% fall compared with the previous quarter, but down 24% on a year ago, this comes as interest rates continue to rise along with the increased cost of mortgages.

Shaun Middleton, Head of Distribution at Principality Building Society, said: “In Spring we saw a few signs that market sentiment was recovering, after being hit badly by the turmoil following the UK Government’s Autumn mini-Budget. However, activity in Q2 has been a little weaker than in Q1 and further weakness now seems likely. This picture is repeated across Wales, with the significant majority of local authorities reporting price falls in the latest quarter, as well as year-on-year.”

Compared with a year earlier, property prices in 9 of the 22 local authorities have still increased, with only Denbighshire, Gwynedd and Powys reporting annual falls of more than 5% (6.1%, 6.1% and 8.9%).

The local authority of Monmouthshire reported both the largest quarterly and annual increases at 12.4% and 15.4% respectively, bringing the new average house price to £415,000.

When comparing average price by property type in Wales, detached homes are the only type maintaining a slight increase year-on-year with a 0.7% annual rise to a new average price of £360,302. While average prices for semi-detached homes have fallen annually by 1.1% to £219,460, terraced homes have fallen by 1% to £171,546 and flats have fallen by 4% to £154,508 when compared to the same period last year.

Shaun continued: “Our last outlook offered up a modestly optimistic view of the future based on the market expectation that interest rates were nearing their peak. However, since then, to fight inflation, the Bank of England has continued to raise the base rate with a 0.25% rise in May and a 0.5% rise in June (so currently standing at 5%).

“Financial markets are now expecting further rises, continuing throughout 2023 and into 2024, perhaps peaking at 6.5%. Constant rate rises have led to mortgage product repricing, and inevitably this has been disruptive. Higher rates also impact the amount people can afford to borrow, as a result sellers have found it harder to attract buyers and some have been forced to offer discounts and lower their expectations in order to secure sales. While few are forecasting a full-scale housing market recession, it is quite clear that the market is becoming more difficult.”