House Prices Rise in Wales Amid Increased Demand and Reduced SupplyHouse Prices Rise in Wales Amid Increased Demand and Reduced Supply According to the Royal Institution of Chartered Surveyors (RICS) Residential Market Survey, house prices in Wales experienced an uptick in June due to increased buyer demand and a decline in available properties. The survey revealed a net balance of 8% of surveyors reporting price increases, a positive shift from the negative figures recorded in previous months. The surge in demand is evident, with 31% of surveyors observing an increase in new buyer enquiries. Conversely, the decrease in supply is illustrated by a net balance of -30% of respondents noticing a reduction in new sales instructions. This marks the lowest balance since August 2021. While sales have been lackluster recently, surveyors expressed optimism for the coming months. A net balance of 32% anticipate an increase in sales over the next three months. The rental market also faces an imbalance, with 40% of surveyors reporting rising demand and -17% noticing a decline in supply. This has led to expectations of rent increases in the near future. Expert Commentary * William Graham of Graham & Co in Newport attributed the price rise to increased demand and limited availability, predicting that falling mortgage rates will further escalate the trend. * Tim Goodwin of Williams & Goodwin The Property People in Gwynedd highlighted seasonal factors and election uncertainty as reasons for a slight decline in activity, but emphasized the ongoing shortage of properties. * Anthony Filice of Kelvin Francis Ltd. in Cardiff observed a wider choice of rental properties but noted that landlords are exiting the market due to increased regulation and reduced returns. * Tarrant Parsons, senior economist at RICS, explained that the housing market is poised for a modest recovery supported by falling swap rates, potential interest rate cuts, and a clear election outcome. Overall, the Welsh housing market exhibits signs of recovery driven by demand and supply imbalances, with cautious optimism among industry professionals for the months ahead.
House prices in Wales rose in June due to an increase in demand and a decrease in supply.
The latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey found that a net balance of 8% of surveyors in Wales reported house prices had increased, up from -4% in May and -8% in April. Surveyors expect this trend to continue with a net balance of 13% of respondents expecting a price increase in the third quarter of the year.
This appears to be the result of an increase in demand, with 31% of Welsh surveyors reporting an increase in new buyer enquiries in June. This is the seventh month this figure has been positive, and a decrease in supply.
The June survey showed a net balance of -30% of respondents in Wales noticing a decline in new sales instructions. This is the lowest balance since August last year.
On the sales front, surveyors in Wales report that sales have been disappointing in the latest survey. Respondents are more optimistic about the coming months, with a net balance of 32% of surveyors expecting sales to increase over the next three months, up from 16% in May.
There continues to be a supply/demand imbalance in the rental market in Wales, with a net balance of 40% of Welsh surveyors reporting an increase in demand (up from 17%) and a net balance of -17% reporting a decrease in supply (the same figure seen in May). As a result, a net balance of 50% of surveyors in Wales expect rents to increase through to Q3.
William Graham, FRICS of Graham & Co in Newport, commented on the sales market as follows:
“We are seeing increased demand with fewer properties available, resulting in higher prices, with asking prices starting to be exceeded. A fall in mortgage rates will accentuate the current trend.”
Tim Goodwin, AssocRICS of Williams & Goodwin The Property People in Gwynedd, added:
“Seasonal factors and a wait-and-see attitude towards the general election have led to a slight decline in activity, but there is still a shortage of new instructions and realistic prices coming into the market.”
Anthony Filice, FRICS of Kelvin Francis Ltd. in Cardiff, said of the rental market:
“There is a wider choice of rental properties and some landlords are considering rental offers. However, landlords are still exiting the market due to increasing regulation and costs, reduced tax benefits, lower returns and general uncertainty.”
Tarrant Parsons, senior economist at RICS, commented on the UK picture:
“While housing market activity remained subdued last month, the forward-looking aspects of the results improved slightly.
“There are a few factors emerging that could support a mild recovery in the coming months. Perhaps most importantly, swap rates have fallen in recent days, and this should allow banks to cut mortgage rates, albeit modestly for now.
“If the Bank of England decides that the current inflation backdrop is favourable enough to ease monetary policy from next month, this could lead to a further easing of lending rates. The recent election also produced a clear outcome, with the housing market seemingly moving up the political agenda. As such, this could serve to restore confidence in the market going forward.”
