Analysing house price trends in Wales in 2024

Wales is a beautiful corner of the world, so it makes sense that people are keeping an eye on the housing market with the hopes of moving there. But with the current UK economy so unstable, the housing market is reflecting that.

There are factors other than the UK-wide economy that influence property prices. Let’s take a look at what affects this and see what the forecast is for the rest of 2024.

Regional housing market overview

Before we can start to look at house prices this year, we will need to hop back to 2023. Looking at last year as a whole, house prices in Wales decreased by 2.7% on average according to data from the Land Registry.

This decrease means that the average price dropped to £215,000 in September 2023, where it was £221,000 in September the year before. Detached property prices were still on the higher end with the average price sitting at £333,000 in September, but terraced houses were a lot cheaper at £166,000.

Economic factors and market condition

Economic factors play a huge role in determining housing market trends. Typically, a strong, robust economy with job growth and steadily rising incomes leads to a healthy demand for housing. This leads to house prices rising as there is more competition for each house. If you are house hunting when this occurs, you may find that houses get snapped up before you’ve even had a chance to view them!

On the other hand, economic uncertainty such as the UK is experiencing now can lead to house prices falling. This is, in part, due to people deciding that money is too tight and the interest rates on mortgages are too high. They may then put off buying until the market stabilises a bit and interest rates decrease.

Older homeowners may qualify for a lifetime mortgage if moving is not an option in the current climate. With both positives and negatives to it, speak to a professional if you are interested in a lifetime mortgage.

Currently, it has been confirmed that the UK has entered a recession. Recessions usually lead to house prices decreasing. Whilst this isn’t great for sellers, buyers with enough funds to buy or put down a large deposit will be happy.

Land transaction tax impact

Not everyone is a first-time buyer. Some people may be looking for a second home or to start building a rental portfolio. One thing these buyers will need to factor into their decision is the land transaction tax, also known as stamp duty rates. Currently, if you are buying a second home you will need to pay this tax on the purchase. This is something that, when house prices are higher, might deter people as it is an extra cost.

Although there was a temporary pause in land transaction tax during the pandemic, it is unlikely that it will happen again. If you are buying your first home then you do not have to pay any additional taxes if it is worth less than £225,000. If it is your second home, 4% needs to be paid up to £180,000 and 7.5% on the remaining portion up to £225,000. Houses worth more will incur a higher level of taxation.