According to Savills’ latest research, the Welsh housing market is on track to outshine the UK average in terms of growth over the coming five years, despite current market weaknesses.
The analysis underscores a brighter outlook for Wales, with certain areas already showing resilience and growth.
Despite a nationwide trend of decreasing property prices, with a 1.9% drop in Wales as reported by Nationwide, regions like the Vale of Glamorgan, Monmouth, and Cardiff have seen price increases, highlighting regional market strengths.
Nationwide data also suggests house prices stabilised in the final quarter of 2023, though a slight decrease is anticipated early this year.
Savills, however, forecasts a robust 21.4% increase in Welsh property values by 2028, signaling a strong recovery and growth phase.
Dan Rees, Savills’ head of residential sales in south and west Wales, reflected on the market dynamics: “The autumn and early winter market last year was notably more active than over the summer, as the market started to settle with lower inflation, reduced lending rates and the Bank of England holding the base interest rate. Price reductions have generated more interest from buyers, especially among those who have had to re-assess their affordability.”
Despite challenges in new home completions, which fell by 7% in 2023, and a significant drop in starts and consents, the outlook remains positive.
Scott Caldwell, head of development for Savills Cardiff, commented on the sector’s challenges and opportunities: “Recently, viability has been incredibly challenging due to the 33% increase in construction costs for housebuilders since the pandemic, coupled with the higher interest rates and a weaker overall sales market.”
However, the extension of the Help to Buy scheme to 2025 in Wales is seen as a pivotal move to support the market.
Claire Turner, head of new homes sales, noted the scheme’s impact: “Use of the scheme had fallen in recent years, as a result of changes to the price cap. The newly extended scheme, having returned to the previous limit of £300,000, has encouraged an uptick in first-time buyers, and is also an attractive consideration from purchasers from over the bridge.”
