Housing market in Wales busy but prices continue to edge lower

Home sales in Wales continued to increase in number last month, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey. However, prices continued to fall and this trend is expected to continue.

A net balance of 52% of surveyors in Wales reported that sales rose through the month of May. This is the highest balance across all UK regions and well above the UK average of -13%. Surveyors also expect that sales will continue to rise over the next three months, with a net balance of 16% of respondents in Wales anticipating an increase.

Looking at pricing, a net balance of -9% of surveyors in Wales reported that house prices fell during the most recent survey. Although this figure remains in negative territory for the second consecutive month, it is above the UK average which sits at -17%. On the short-term outlook, a net balance of -18% of surveyors in Wales expect that prices will fall over the next three months.

Regarding demand, a net balance of 18% of Welsh respondents noted a rise in new buyer enquiries. This is the sixth consecutive month that this figure has been in positive territory.

On the supply side, a net balance of 68% of Welsh surveyors noted a rise in new instructions to sell. This is the highest this balance has been since the pandemic.

With regard to the lettings market, a net balance of 17% of surveyors in Wales reported a rise in demand for rental properties and a net balance of -17% noted a fall in landlord instructions which may have led to the rise in rental expectations with a net balance of 33% of respondents in Wales anticipating an increase in rents over the next three months.

Commenting on the sales market, Melfyn Williams, MRICS of Williams & Goodwin The Property People Ltd in Anglesey said: “The local property market saw cautious improvement across all price ranges. In the second half of the month, we’ve seen a noticeable uptick in activity across all price ranges. While buyers and sellers are still proceeding with caution, the momentum is definitely picking up.”

David James, FRICS, James Dean in Brecon added: “Sales are good although purchasers are careful and will only buy the property that is right for them.”

Discussing the lettings market, Tim Goodwin, AssocRICS, Williams & Goodwin The Property People in Gwynedd commented:“Landlords continue to leave the market due to fear of bureaucratic controls and tenant demand remains extremely strong resulting in higher rents and numerous applicants desperate for the same property.”

Commenting on the UK picture, Tarrant Parsons, RICS Senior Economist, said: “The recent recovery across the UK housing market appears to have slipped into reverse of late, with buyer demand losing momentum slightly on the back of the upward moves seen in mortgage rates over the past couple of months. Nevertheless, expectations point to this delaying, rather than derailing, a modest improvement going forward. Indeed, respondents continue to envisage a more positive trend in sales activity coming through over the year ahead, although this is likely predicated on the Bank of England being able to start lowering interest rates in the coming months.”