Principality Building Society House Price Index Wales, Q1 2023
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HOUSE PRICE
INDEX
Principality Building Society
House Price Index
Wales, Q1 2023
Where home matters
principality.co.uk
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Principality Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation
Authority, reference number 155998. Principality Building Society, Principality House, The Friary, Cardiff, CF10 3FA. principality.co.ukHouse prices subdued in Wales
The average price of a home in Wales has fallen from a record high of just over
£249,000 in Q4 2022 to just over £245,000 in Q1 2023.
Quarterly prices decreased by 1.6% in Q1 – the first dip since the Covid pandemic -
and this dragged annual price growth down to 5%, around half the rate of three months
earlier. A more adverse picture is seen across Wales, with more local authorities reporting
price falls in Q1 rather than increases, and prices reaching new highs in just five of the
22 authorities.
Transaction levels were hit significantly following last Autumn’s mini-Budget, and by the
resulting increase in mortgage rates. Activity in Q1 was the weakest since the pandemic,
with sales down 17% year on year and 26% quarterly.
Annual change Quarterly change Decrease in transactions Average House Price
5% 1.6% 17%
Q1 2023 vs
£245,101
Q1 2022
“ Much like the rest of the UK, housing market We are seeing increased signs of lenders
conditions in Wales are more subdued than competing to attract business, rates have
in previous quarters. We are at a point in the been edging down and lenders are looking
housing market cycle where wider economic for new ways to support borrowers who are
factors are weighing more heavily on, and struggling with mortgage affordability.
affecting the existing underlying demand
for homes. Future prices will be determined The picture across Wales in terms of Q1 price
by key variables such as; the movement of movements was quite varied, and we would
Shaun Middleton, interest rates, inflation, and cost of living expect this to continue. Although there
Head of Distribution burden. The radical shift in mortgage rates have been suggestions of a major housing
at Principality Building over the last year cannot be disregarded, market correction, such gloomy views have
moving from a decade at around 2% to softened in recent weeks, reflecting the
Society said: closer to 5% in the space of 12 months. slightly better-than-expected performance
We expect rates to settle around this level of the UK economy. There are some positives
for the remainder of 2023 and into 2024. that the market is settling to its new level.”
Market Snapshot
Property prices overall are higher in 20 At the other end of the spectrum, Whilst significant variation of reported
of the 22 local authority areas compared Gwynedd and Anglesey reported price changes continues, the overall
with a year earlier. However, there are annual falls in nominal terms, whilst quarterly pattern reflects a marked
now just six authorities reporting annual several other authorities – Flintshire, shift from strong price increases to one
price increases of 10% or more. Merthyr Monmouthshire, and Swansea in of price reversals, as well as a more
Tydfil- a more affordable area - heads particular - reported only very subdued market. Consistent with bearish
the annual increase table, with a gain modest increases. market conditions, in Q1 more local
of 20%. authorities (14) reported price falls than
increases (8) – an exact mirror image of
the situation in Q4 2022.Average house prices in Wales,
March 2021 to March 2023
£255,000
£245,000
£235,000
£225,000
£215,000
£205,000
£195,000
£185,000
£175,000
Mar 2021 Sep 2021 Mar 2022 Sep 2022 Mar 2023
Source: Acadata, mix and seasonally adjusted
The price of homes in Wales fell by £4,000 from December’s peak to just over £245,000 in March, causing the year-on-year rate
of price rises to halve from 9.9% to 5% - the weakest outturn in more than two years.
Chart 1 above shows the average price of homes in Wales over the last two years, adjusted for the mix of property types and
seasonal effects. The strong and sustained upwards trajectory in home prices throughout the past few years- in Wales as in all
other parts of the UK- has begun to fade in 2023. As the chart shows, prices are now easing back.
House Price Inflation
8
7
6
5
4
3
2
1
0
-1
-2
Mar 2020 Mar 2021 Mar 2022 Mar 2023
Source: Acadata, mix and seasonally adjusted
Chart 2 indicates that the strong quarterly rates of house price inflation are now over. Prices fell back by 1.6% in the latest quarter
– the first post-pandemic reversal not just with price rises slowing, but now falling - and dragged the headline figure shown in
Chart 1 down.
Chart 2 - Quarterly % change in average prices, Wales, March 2020 to March 2023.
The Principality Building Society House Price Index for Wales is prepared from dataset provided by Acadata using its methodology. It is published as a secondary source of
economic information, but is not intended to be relied on for any commercial or personal decisions and no responsibility is assumed by Principality or Acadata if it is used
contrary to that intention.Annual % change in prices by property type,
Wales, year to March 2023
Detached Semi detached Terraced Flat
16%
14%
12%
10%
8%
6%
4%
2%
0%
Source: Acadata, mix and seasonally adjusted
Looking at price movements by property type (Chart 3), this more subdued market is affecting all property types. The latest average figures
show that for the first quarter, detached, semis and terraced properties were still up but by a diminishing 5-8% year-on-year, whilst the
price trend for flats was close to zero.
Quarterly transactions by property type,
Wales, Q1 2022 to Q1 2023
14,000
12,000
10,000 Q1 2022
8,000 Q2 2022
6,000 Q3 2022
4,000 Q4 2022
2,000 Q1 2023
0
Detached Semi-detached Terraced Flats All types
Source: HM Land Registry and Acadata estimates
It is estimated that there were fewer than 10,000 transactions in Wales in Q1, a dramatic fall compared with both the previous quarter,
and with a year ago. These latest figures for activity were adversely affected by the hike in interest rates and the sharply increased cost of
mortgages, following last Autumn’s mini-Budget. There have been signs of improvement in recent months, but it is not yet clear what the
new normal will look like in terms of sustained activity levels.
As can be seen in Chart 4, the decline in sales has been across all property types. However, sales of detached properties continue to lag
(23% lower over the quarter). This seems to be part of a general trend, perhaps reflecting the aftereffects of a post-pandemic rush to buy
detached properties, along with more recent cost-of-living and affordability pressures, resulting in greater demand for smaller homes
and an accompanying reduced demand for larger properties. The average price of a detached house in Wales is £364,275, semi-detached
£226,347, terraced homes average £171,290, whilst flats cost on average £152,576.
The Principality Building Society House Price Index for Wales is prepared from dataset provided by Acadata using its methodology. It is published as a secondary source of
economic information, but is not intended to be relied on for any commercial or personal decisions and no responsibility is assumed by Principality or Acadata if it is used
contrary to that intention.Average annual and quarterly
change by local authority
1 Newport 22 Anglesey
Average
Annual
12.8% 6.1% -3.5%
-0.6% 5.6%
change %
£269,792 Average £269,144
Quarterly
22
2 Cardiff Change % 21 Conwy
19
3.8% -1.9% 5.4% -1.1%
21
£300,095 20 £235,574
18
3 Monmouthshire 20 Denbighshire
17
2.0% -5.4% 8.4% -0.6%
£369,047 £230,878
4 Torfaen Annual 19 Flintshire
Growth
8.8% 8.1% 0.2% -5.2%
0.5%
£229,692 Annual £223,596
Decline
5 Caerphilly 18 Wrexham
16
6.1% -4.1%
13 9.6% 0.9%
£199,869 £231,702
6 Blaenau Gwent 17 Gwynedd
15 14
12.8% 3.8% -5.5% -8.3%
£161,230 6 £222,683
7 3
12 11 4
7 Merthyr Tydfil 8 5 16 Ceredigion
20% 5.1% 10 1 8.6% -1.6%
2
£187,350 9 £284,813
8 RCT 15 Pembrokeshire
The Principality Quarterly House Price Index has been prepared by Acadata Ltd for the Principality Building
Society. The underlying data used for the house price analysis are supplied by the Land Registry, which records
5.7% -3.0% 5.0% 1.1%
all housing transactions that take place in England and Wales. The data are subsequently mix and seasonally
adjusted by Acadata using established statistical procedures.
£176,215 £260,081
9 Vale of Glamorgan 10 Bridgend 11 Neath Port Talbot 12 Swansea 13 Powys 14 Carmarthenshire
10.5% 5.5% 13.0% -1.7% 10.9% -1.4% 0.1% -3.4% 9.1% -1.7% 6.4% -4.1%
£365,885 £235,702 £177,741 £220,847 £277,234 £225,938
Click here to view Principality’s interactive HPI map for WalesYou can also read
