"Low supply of housing is a real challenge for buyers and there is also more that can be done to support buyers when it comes to the matter of affordability- especially for those hoping to get onto the housing ladder for the first time"
- Iain Mansfield - Principality Building Society
Newly released figures from Principality Building Society have revealed that the number of transactions during the final quarter of 2024 was at the highest level for three years, following quarter-on-quarter growth which signals a strong consumer appetite, and a housing market in Wales that is poised to turn a corner.
The Bank of England’s decision to lower the base rate in February 2025, combined with the continued demand, represents green shoots for the housing market.
Outside of the national picture of moderate rises in prices, there is a mixed picture at a regional level.
Buyers in Carmarthenshire and the Isle of Anglesey could expect to pay more, as these areas saw rises of 8% and 7.8% respectively in the final quarter of the year.
Other areas, including Merthyr Tydfil, saw prices fall in Q4, dropping 17.9% in the last three months of the year. Meanwhile, the year-on-year trend for the same region suggests just over a 5% drop.
Overall, Principality Building Society research, based on HM Land Registry data, can reveal there are fewer price declines in regional areas than a year ago, for the past three quarters of the year, offering some stability for buyers and sellers in a changing market.
“The housing market in Wales has demonstrated resilience against a challenging environment throughout 2024, with Principality's House Price Index showing clear signs of renewed confidence," explained Iain Mansfield, Chief Financial Officer at Principality Building Society, “The steady growth in transactions highlights strong demand for housing underpinned by the ongoing challenge of limited supply, which continues to shape the market landscape.
He continued, “A more stable housing market is welcome news for buyers and speaks to the strong demand for housing, driven by buyers looking to enter or move within the market, despite the challenging landscape of the last few years.
“This demand is evident in the approximately 12,800 transactions that were recorded in Wales in the fourth quarter, which represents an 18% increase when compared to the third quarter. It is also a 28% rise year-on-year – the highest level observed since late 2021. This reflects the continued recovery in transactions that began in the second quarter and indicates that despite continued cost-of-living pressures, and the elevated rate environment, demand continues to grow.
“Low supply of housing is a real challenge for buyers and there is also more that can be done to support buyers when it comes to the matter of affordability- especially for those hoping to get onto the housing ladder for the first time. Principality conducted a recent survey which revealed that 75% of our Member respondents say that house prices in the UK are ‘too high’, and a further 74% of respondents agree it is ‘much harder’ for young people to get on the housing ladder," he said.
“Looking ahead, the UK Government have stated they are committed to extensive planning reforms in order to restore local housing targets – with a particular focus on increasing social and affordable housing. This, coupled with the additional help for first-time buyers in Wales, where housing matters are devolved, announced at the recent Welsh Government Budget, signals a positive future outlook.
Iain concluded, “There is undoubtedly more to be done to ease affordability, and as a leading funder that works with the majority of housing associations in Wales, Principality has a vested interest in being part of the solution.”
