Wales is still the region with the highest average house price increase across the UK, according to the house price index released by the Office of National Statistics (ONS) covering the year-on-year comparison to March 2022.
The data indicates that although the average house price in Wales has increased by 11.7% to the record high of £206,395, this figure is only a 0.4% increase since February, potentially suggesting the beginning of a slowing down of rampant house price increases seen since the Covid-19 pandemic.
The UK average house price increased by 9.8% over the year to March 2022, which is down from the 11.3% figure reported for February 2022. The average UK house asking price was £278,000 in March 2022, which is still £24,000 higher than for the same time in 2021.
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The next UK region to see the highest year-on-year growth to March 2022 is Northern Ireland, with a 10.4% increase to an average asking price of £165,000. England has seen a 9.9% increase to bring its average house price to £298,000,
Scotland was the slowest market in the year to March 2022, experiencing a 8% increase resulting in an average house price of £181,000. London continues to be the region with the lowest annual growth at 4.8% according to the ONS data.
The data reveals that there has been a drop in the volume of transactions both across the UK and Wales. The ONS states that when comparing the provisional volume estimate for January 2021 with the provisional estimate for January 2022, the volume of transactions decreased by 29.9% in Wales and by 37.0% over the same period for the UK as a whole.
Nicky Stevenson, managing director at national estate agent group Fine & Country says: "This data indicates that house price correction may be gradual rather than sudden, despite the headwinds which are multiplying in the broader economy.
"While the housing market is certainly approaching a crossroads, new instructions remain thin on the ground and supply bottlenecks persist around the country. As spiralling inflation and increased borrowing costs continue to stretch buyer affordability, we expect to see more evidence of house price moderation in the months ahead."
Nicky comments that it is unclear how the rising cost of living and highest inflation in forty years will affect house prices moving forward, but this growing situation is mitigated somewhat by the remaining strong appetite amongst existing homeowners to trade-up.
The regional breakdown of the latest ONS figures for Wales indicates that although the counties of Blaenau Gwent and Merthyr Tydfil continue to experience some of the highest house price growth across our nation, the highest average house price hike in the year to March 2022 was in Vale of Glamorgan.
In Wales, all local authority areas showed an increase in average house prices in the year to March 2022. Vale of Glamorgan showed the strongest growth, rising by 24.3% in the year to March 2022 to £313,000. In contrast, Denbighshire showed the lowest annual change, with an increase of 7.9% in the year to March 2022, with the average house price at £193,000.
Of all property types, detached houses showed the largest annual growth, rising by 14.5% in the year to March 2022 to £321,000 suggesting the 'race for space' when looking for a new home is continuing. Flats and maisonettes showed the lowest annual growth, rising by 5.2% in the year to March 2022, to an average price of £129,000.
Nick Leeming, chairman at estate agency Jackson-Stops suggests there will be sustained property demand to weather the cost of living storm, at least within the coming months.
He says: "Although the pace of growth was slightly below February's high of 11.3%, it remains clear that house prices are outpacing expectations once again, despite headlines on interest rates rises and consumer spending power dominating our front pages.
"We may see the cooling effects come into play more in the coming months but significantly, unlike other periods of high inflation, it is the sustained demand from home buyers that will continue to press house prices upwards in the short term in spite of macro-economic headwinds."
As with other indicators in the housing market, which typically fluctuate from month to month, the ONS reminds readers of its data that it is important not to put too much weight on one month's set of house price data.
