House price inflation in parts of Wales hits 10%, while London falls
As buyers rush to beat the new stamp duty rates, property prices in Monmouthshire leap 11.3% in a year
A rush to beat new stamp duty rates has pushed annual house price inflation in large parts of Wales to above 10%, in sharp contrast to rapidly declining prices in London.
Prices in Monmouthshire jumped by 11.3% in the year to the end of March, according to the Your Move index. But the rugged landscape of the Brecon Beacons appears to be the last refuge of the property boom, with Your Move reporting striking price falls in London.
In the City of London, which is mostly office towers but includes the Barbican residential complex, prices were “down a huge 31.4%”, pushing the average price down to £683,000 from £997,000.
Southwark, which stretches from the Thames south to Crystal Palace, saw the second steepest price falls, down 17.5% over the year and 6.1% in March alone.
In England and Wales overall prices were down 0.1% in March, the third month in a row of falling prices.
“The annual rate of growth has now fallen for almost a solid year – 11 months in succession. It now stands at just 1%, down from 9% at its height in February 2016,” said Your Move.
Wales bucked the trend as buyers sought to complete before the introduction of a new tax regime. Prices in Cardiff and Swansea were up 9.7%, the Vale of Glamorgan 10.2%, and Torfaen 10.4%, over the year.
“There’s a simple explanation for this stellar performance: forestalling,” said Oliver Blake, managing director of Your Move and Reeds Rains estate agents. “Wales introduced a new land transaction tax in April, starting at a higher base, of £180,000, than stamp duty in England (£125,000) but at a higher rate, particularly for properties priced £400,000 to £925,000, with tax rates at 7.5% and 10%.
“Anticipating this, buyers have brought forward purchases of high value homes to avoid the new tax, just as they did ahead of the stamp duty hike in April 2016. Consequently, six of the eight most expensive local authority areas in Wales set a new peak price in March. Such high price growth in Wales is likely to prove short-lived.”
Outside of London, the biggest price falls were in Windsor and Maidenhead, which may benefit anyone inspired to move there by Saturday’s royal wedding. Prices in the area fell 9.2% over the year. “Perhaps tellingly, the area also has the highest average house prices outside London, at £542,285,” Blake said.
Despite evidence of price falls in London and the south-east, sellers are still expecting to achieve higher prices, according to separate data from property website Rightmove.
It said the asking price of property coming to the market hit a new national record with a monthly increase of 0.8% (+£2,343) pushing the average up to £308,075.
But it added: “Different markets are still operating at different speeds, and the overall picture is one of a less buoyant market both in terms of price growth and number of sales agreed.”
Transaction activity is down significantly. The number of sales being agreed by estate agents so far in 2018 compared to the same period a year ago fell most in the south-east (-8.5%), the east of England (-7.8%), and Greater London (-6.9%). Nationally, sale agreed numbers are down by 5.4%.
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