House price slowdown 'election factor' - Principality

Homes in NewportImage source, Getty Images
Image caption,
Newport has seen a 5.1% annual rise in house prices but is one of 16 local council areas where there has been a drop over the last quarter

There has been a slowdown in the rise in house prices in Wales, according to the latest index by the Principality Building Society.

Its quarterly analysis shows that prices increased by 0.8% or £1,375 in the last year.

This annual rate of growth is the lowest seen since August 2013.

The building society said this was a sign of a slowing down of the market but warned not to read too much into one set of results.

It believes June's general election may have been a factor, especially given the close result.

A similar fall was seen in consumer confidence after the EU referendum in June last year though this returned by September, it said.

The average house price in Wales is now £171,720.

Pembrokeshire saw the biggest annual rise - 10.1% to £191,951 - while Flintshire saw a fall of 4.1% to £172,645.

Blaenau Gwent has the lowest average price - £96,197 - but has seen prices increase over both the quarter and year.

The current low interest rates and high employment levels are seen as providing a very positive environment for buying a home.

However inflation is increasing beyond the level of wages rises.

This means people can expect to feel more of a squeeze on their income which might have an impact on major financial decisions such as house purchases.

Unlike some other measures of sales, the Principality's house price index takes account of all properties sold - not just mortgages provided by the building society.

It argues that this gives a better representation of the market as a whole.

Tom Denman, the Principality's chief financial officer said the housing market tended to adopt a cautious attitude when the future direction of the economy became uncertain.

"We can therefore expect to see further fluctuations in housing sales and prices, as potential purchasers weigh up the pros and cons of making what is one of the largest investment decisions of their lives," he said.

But he added that mortgage rates remained at historic lows and the market was "highly competitive" for those who did choose to buy."

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