House prices in Wales - where the equivalent of the stamp duty holiday has fully ended - rose to a new average peak price of £215,810 in June, with the strongest rate of growth reported over the past year.
The figures have been released from Principality Building Society’s Wales House Price Index for Q2 2021, which demonstrates the rise and fall in house prices in each of the 22 local authorities in Wales.
Despite annual house price inflation of 12.5 per cent there is some sign that the strong pace of increases seen around the turn of the year has begun to abate, with the quarterly rate of increase now down to 1.4 per cent.
This is likely to be a result of the Land Transaction Tax holiday coming to an end in June and could indicate price growth slowing in the second half of 2021.
Tom Denman, chief financial officer at Principality Building Society, says: “The scale and strength of the housing market in Wales to date does suggest that this momentum will continue into the final quarters of the year. Clearly, the stimulus effect of the Land Transaction Tax holiday will have disappeared by then, and because some purchases were brought forward to capture that benefit, there will be an inevitable dip in activity.
“Alongside this, the furlough scheme ends in September, thus further revealing the underlying state of the economy and employment. Various forecasts suggest that Wales - along with other parts of the UK - will see house price inflation down to just under five per cent in 2022 and onwards.
“Much will depend on the course of interest rates and the economy, but the mortgage market remains very competitive with rates having fallen in recent months after slightly increasing at the height of the pandemic.”
Principality’s House Price Index estimates that there were around 13,400 transactions in Q2 2021, nearly treble the Covid-depressed level of the same time the previous year (4,800 sales), but also significantly higher than the more “normal” period of Q2 2019 (11,000 sales).
All 22 local authorities reported rises on an annual basis in Q2, repeating the performance of the previous quarter. All 22 local authorities reported rises on an annual basis in Q2, repeating the performance of the previous quarter.
Prices in eight authorities – Blaenau Gwent (£128,441), Bridgend (£214,081), Conwy (£222,944), Merthyr Tydfil (£159,101), Neath Port Talbot (£160,324), Rhondda Cynon Taf (£150,726), Vale of Glamorgan (£330,396) and Torfaen (£198,476) – reached new peaks in Q2.
Nine local authorities reported annual price increases of more than 15 per cent with Blaenau Gwent (19.6 per cent), Bridgend (19.4 per cent), Carmarthenshire (19.9 per cent) and Conwy (19.7 per cent) all reporting an annual rise of almost 20 per cent.
Many of these local authorities also reported strong quarterly gains. But three major Welsh cities - Newport, Swansea and Wrexham - along with Powys, all reported quarterly prices around five per cent lower.