Sunny outlook for Wales

Average property prices in Wales will increase by 10.99% in the next 12 months - more than twice the UK average - according to a report published by data from BNP Paribas Real Estate (PRE).

The report, Housing And The Economy, claimed that Welsh house prices grew far more than BNP PRE had predicted in the latter half of 2009.

At the beginning of the year, it forecast growth of 1.15% for house prices in Wales for quarters two and three, but the actual increase stood at 8.63%.

Welsh estate agents agree that the market will see steady growth this year and into 2011. Mick McGuire, managing director of Principality Building Society’s estate agency subsidiary Peter Alan – which has 23 branches across South Wales – said: “Prices have stabilised in 2009. I think maybe prices will come off a little at the start of the year and then go up.”

McGuire added that, as mortgages become more available, increasing numbers of first-time buyers are returning to the market and overall confidence in the sector is improving. He also pointed out that many of the unemployed in Wales – people in their 20s and university graduates – are not on the housing ladder, and hence their joblessness has not impacted on the property market as it may have done in recessions of the past.

He said: “There will be a gradual release of pent-up demand and what we will see is people wanting to move up the market begin to do that.

“There are people who have been sitting on their hands for the last 18 months and they will come back to the market and we will see a more normal market recovering, with first-time buyers there to pick up the first-time properties.”

Tony Filice, residential spokesman for the Royal Institution of Chartered Surveyors in Wales, reinforced the view that the market has returned to growth. He said: “There will be a slow start to the first couple of months of the year, but a lot of first-time buyers are coming into the market and that will release others.

“The improvement in the market will be a steady one and the increases in prices will be marginal. There will be sectors of the market where the demand will be greater and where prices will increase faster – such as three-bedroom homes.

“For the rest of the market prices will hold off and level off. As long as mortgages are freely available, we are optimistic.”