Last year saw property prices in Wales grow by 3.3% to £179,855, and with the Severn Bridge toll fee about to be scrapped, could this be the start of the end of cheap Welsh property?
The latest report from the Principality Building Society saw UK average house prices inflate by 2.7% in 2017, with the West Midlands, Wales and the north-west of the country providing a major boost to the results compared to parts of London and the south-east.
In Wales, the property market was varied but Cardiff’s terraced properties proved one of the most popular buys – which is probably a result of the stamp duty changes that were brought in for first-time buyers in last year’s Autumn Budget, abolishing the tax on properties up to the value of £300,000. Terraces in the city rose by £3,000 in the final quarter of 2017, and buyers will be keen to complete transactions before Wales brings in its new land transaction tax in April this year.
Newport is another city on the up, after the highest number of new-builds in the country were built here as it becomes an increasingly popular place to live and invest. The city saw average house prices increase to £183,683 by the end of 2017, and the trend is likely to continue as more regeneration takes place in the area.
Big changes are afoot in Wales
One huge change that many believe will push Welsh house price up even higher, particularly in the south of the country, is the scrapping of the toll charge on the Severn Bridge. Charges have already been dropped this month from £6.70 to £5.60 for cars after the bridge went into public ownership, and charges are expected to be abolished by the end of the year – although First Minister Carwn Jones thinks it should happen straight away.
Welcome news for businesses & commuters – although the #severnbridge tolls should be scrapped now, not at the end of the year. https://t.co/YIRkfWPXkF
— Mark Drakeford (@PrifWeinidog) January 8, 2018
Many people who currently work in places like Bristol just over the border choose to buy properties in Wales because prices are so much lower, making it worth paying the toll fee. Rhosneigr holiday lettings also proving really popular for investors.
Once the bridge crossing becomes free, there could be a surge in demand for property in south Wales, which would have the effect of pushing up prices even further in 2018. It would also create more opportunities for investment, and could mean the growth of new-build developments in Newport could spread further afield and bring with it huge regeneration for the area.
Vicky Kells from Clarke Willmott LLP advises a cautious approach to the repercussions of abolishing the Severn Bridge toll fee.
“There is no doubt that the removal of the tolls will create a number of tremendous opportunities and confirm that Wales is very much open for business,” said Kells. “Rather than get caught up in the initial euphoric rush, a much more considered, strategic approach is needed that has longer-term considerations for South East Wales’ housing needs.”
