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Scrapping of the Severn bridges tolls has boosted Welsh house prices

Scrapping of the Severn bridges tolls has boosted Welsh house prices
Mark Langshaw

Author: Mark Langshaw - Content Manager

Updated: June 10, 2022

Welsh house prices increased by 4.1% in the year to February 2019, suggesting that if you want to buy property to live in or rent out in Wales you may have some competition.

Indeed, data from Office for National Statistics data shows that house price growth in Wales is outstripping that in England and Wales.

Over the same period prices rose by just 0.4% in England and fell by 0.2% in Scotland, though there was a strong price rise in the North West (4.0%), which was the only area of England to closely match Wales.

Severn bridges tolls

Why have prices been pushed up?

A short-term factor is the removal of the Severn Bridge tolls on 17 December 2018, which means you don’t have to pay to drive from England and Wales.

Previously it cost cars £5.60 and heavy goods vehicles £16.70 to make the westbound crossing, with the charge being in place since 1966.

Commuter belt

After the change, it’s more attractive to commute to work in Wales from English cities like Bristol, or vice versa.

The change clearly gives Cardiff a boost, seeing as the Welsh capital has been an attractive city to work in for years, with a significant commuter belt. Cardiff prices rose by 4.6% to £209,853 in the year to February 2019.

However other areas of the South East of Wales have seen the biggest surge when it comes to house prices.

In the year to February 2019, the county of Monmouthshire achieved house price gains of 9.4% and Newport saw prices increase of 9.5%, though the leading constituency when it comes to price inflation was Blaenau Gwent, with an eye-watering increase of 16.3%.

Since the tolls were removed there has been a rise in activity on the bridges, with crossings increasing by more than 10% since 17 December 2018, figures from Highways England show.

Affordable

The average house price in Wales is £160,000, a far cry from the sky-high prices in London and the South East of England.

In Wales terraced houses saw prices rise by 5.5% to £124,000, with the cost of semi-detached properties increasing by 4.7% to £154,00 – so it seems there’s strong demand for both types of tenure.

Given that prices in Wales have yet to boom since the global financial crisis, there’s a feeling that there’s plenty of room for prices to increase, unlike areas in England.

Indeed, real estate firm Savills predicted Welsh house prices to rise by 20% in the next five years.

Brexit

Not that it’s all positive when it comes to Welsh house prices. Clearly, some areas of the North of Wales haven’t benefitted like in the South, with Flintshire seeing prices falling by 0.7% for example.

Meanwhile, data from Principality Building Society found that the pace of price increases slowed in the first quarter of 2019, with its chief financial officer blaming Brexit on the slowdown.

However, in a year where there’s been so much negativity regarding housing activity, it seems the removal of the Severn bridges tolls has acted as a shot in the arm for the housing market in Wales.

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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