It doesn’t matter which house price index you swear by, they’re all saying the same thing: that Wales was, by far, the best performing region in 2021 in terms of annual house price growth.
This may come as a surprise to those who follow house price trends. In a field which has been dominated by London and the Eastern regions, Wales has often fallen short when compared to the average UK annual property price growth, reaching a maximum of 5.0% growth between 2010 and 2020, whilst the highest UK annual price growth reached 10.5%.
However, that’s all changed in 2021. In Nationwide’s latest house price index, Wales saw annual house price growth hit 15.8%, making it the strongest performing region across the UK and surging ahead of the national average growth rate of 10.1%. In fact, it was the first time since Nationwide begain their regional HPI series in 1973 that Wales had been the strongest region.
And oh, how the mighty have fallen: London found itself slumped at the bottom of the pile, with house prices rising just 4.2% in the year.
Halifax report a similar level of growth in their house price index for November, with property prices in Wales growing by 14.8%.
“Buying a property in Wales has never been so expensive, with the average house price breaking through the £200,000 barrier for the first time in history.”Halifax House Price Index, November 2021
And, if you prefer to go by the Government’s official figures, you’ll find a similar story: annual house price growth in Wales to October 2021 reached 15.5%, the largest increase across the country, with the average property price valued at £203,224.
Why is house price growth rising so significantly in Wales?
There are, of course, a number of factors which are driving house price growth in Wales, but the key driver is affordability. The pandemic has resulted in a priority shift for those looking to buy a property, away from cities and towards more rural locations.
Buyers also want more for their money, and Wales provides the perfect combination of idyllic countryside and affordability. Using Nationwide’s figures, and the latest official statistics for median UK household income, the average property in the UK is around 8.5x average earnings. In Wales, this figure falls to 6.6x earnings.
As we slowly emerge from the depths of Covid, it will be interesting to see if Wales’ growth stabilises or falls to pre-pandemic levels. One thing is certain, though: those moving to the country in search of sea and space have bagged themselves a bargain.