Scrapping of the Severn bridges tolls has boosted Welsh house prices
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.
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.
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.
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.