Halifax: House price growth in Wales at 16-year high

House price growth has risen to 13.8% in Wales, the highest level recorded in the country in 16 years, Halifax’s house price index has found.

Investors in the region have profited from substantial capital growth in the past year, as prices in Wales are now up to an average of £195,000.

Other areas seeing strong growth are Yorkshire and the Humber (11%) and the North West (10.4%), though London still lags behind (2.5%).

Tomer Aboody, director of property lender MT Finance, said: “Property prices continue to rise as the strongest housing market we have had in years continues to perform well, with confidence in the economy growing and lack of supply supporting values.

“The national average house price conceals significant regional differences with areas such as the North West, Wales and Humberside seeing the biggest growth.

“Overall, this isn’t a surprise as these areas are more affordable but there is more to it than this – they also provide greener spaces, underlining the desire of buyers and changing sentiment with regard to wanting more space.

“As borrowing remain at its cheapest levels ever, we expect a strong market to continue.”

For the UK as a whole house price growth moderated to 7.6% in July, down from 8.7% in June – in signs the market is starting to stabilise after months of out-of-control growth.

Monthly and quarterly growth still stood at relatively high levels, 0.4% and 2.4%, bringing the average price to £261,221.

Russell Galley, managing director of Halifax, said: “This easing was somewhat expected given the strength of price inflation seen last summer, as the market began its recovery from the first lockdown, and with activity supported by the start of the stamp duty holiday.

“Recent months have been characterised by historically high volumes of buyer activity, with June the busiest month for mortgage completions since 2008.

“This has been fueled both by the ‘race for space’ and the time-limited stamp duty break. With the latter now entering its final stages (the zero percent rate only applies to the first £250,000 of the purchase price, before reverting back to standard rates from October), buyer activity should continue to ease over the coming months, and a steadier period for the market may lie ahead.”

Galley added: “Although there remains some uncertainty over the impact on employment from the unwinding of government support schemes, on balance the risks to the macro-environment are receding, with consumer confidence improving, the labour market recovering, and the economy expanding as restrictions are lifted.

“Overall, assuming a continuation of recent economic trends, we expect the housing market to remain solid over the next few months, with annual price growth continuing to slow but remaining well into positive territory by the end of the year.”

Colby Short, founder and chief executive of GetAgent.co.uk, worried about buyers paying too much for homes in the current climate.

He said: “A shortage of stock, high demand and the lower cost of borrowing will keep the market buoyant far beyond September and the end of the stamp duty holiday.

“However, should interest rates start to creep up over the coming months, many homebuyers could find themselves in a tough spot having paid over the odds for a property in current market conditions.”

Ben Taylor, chief of Keller Williams UK, highlighted the impact of the winding down of the stamp duty holiday.

The minimum threshold has already dropped from £250,000 to £500,000, while it will fall back to £125,000 at the end of September.

He said: “Homebuyer confidence remains high at present despite many having to battle it out with multiple other buyers in order to secure a purchase.

“This continued imbalance between supply and demand will ensure house price growth remains buoyant over the summer months, although we can expect a slow in pace as we approach the final quarter due to a combination of the stamp duty holiday ending and wider seasonal influences.”

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