House prices in Wales have fallen £338 on average since May and now stand at £150,189, according to LSL Property Services.
However, according to Oliver Blake, managing director of Reeds Rains estate agents, the number of first time buyers is improving slightly with reports of new buyer enquiries in Wales shooting up in June to double the three month average.
"Despite growing optimism regarding the market across the border, the Welsh housing market is still caught in the grip of the credit crunch," he said. "House prices have slipped by almost £2,500 compared to a year ago and have dropped again by £338 in the last month. Prices have fallen in nine of the last twelve months, thanks largely to the ongoing squeeze on personal finances.
“The mortgage market is thawing in England and parts of Scotland but the multiplier effect hasn’t spread to Wales. In June this year sales were 12.6% lower than this same time last year. In Wales, there is a two-tier market, and there’s an unhealthy reliance on wealthier borrowers. These older buyers are in a stronger position to benefit from the record low mortgage rates, as they have been able to bank on the equity from their homes to grab cheap deals. Affordable rates are of little comfort for first-time buyers who can’t put down the big deposits required by banks and building societies. And this is continuing to quash activity and push down prices."
Earlier this month, Connells revealed that the total number of residential valuations conducted in July was 24 per cent higher than the same month last year. The increase was fuelled by a 45% growth in remortgaging activity in July.