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Cautious optimism for housing market as sales rise

BBC A brown haired woman in a patterned blouse sitting in a kitchenBBC
Anwen Waring is struggling to sell her house as she looks to move closer to her family

There are "glimmers of steady improvement" in Wales' housing market, a building society has said, after figures showed an increase in transactions but a drop in average prices.

Data from Principality Building Society showed the average house price in Wales had fallen to £232,400, a drop of almost 3% over the past year.

But the Wales House Price Index showed the number of sales increased by 11% over the previous 12 months.

Shaun Middleton, head of distribution at Principality, said there was "no clear direction" with house price trends.

However, figures from Halifax and Nationwide, which look at the housing market across the UK, said house prices in Wales had increased in the past year, by 4.4% and 2.5% respectively.

Despite the increase in sales, some, like Anwen Waring, 28, said they were struggling to attract interest.

Ms Waring, 28, and her husband Kieran, put their house in Margam, Neath Port Talbot, on the market about a month ago, but said "interest hasn't been very good".

They said their house was perfect for a first-time buyer, but the price had increased substantially since they bought it in 2021.

"First-time buyers are having to extend their budgets significantly," she said.

"The market’s just not doing as well as anyone hopes."

The couple intend to move to Porthcawl to be nearer friends and family and have found a house they want.

"We’re hoping and praying that it doesn’t sell" said Ms Waring.

"But we’ve just got to bide our time with this house."

The housing market has been hit in recent years by the cost of living crisis and the Bank of England increasing interest rates which makes borrowing, including mortgages, more expensive.

But with inflation, which measures the rate at which prices are rising, now below the Bank’s target of 2%, many analysts are expecting interest rates to come down further than they already have.

In August the Bank cut rates for the first time in since the start of the pandemic in March 2020 from 5.25% to 5%.

The overall average house price in Wales fell compared with the previous April to June quarter, which had seen the first rise for more than a year, according to Principality's quarterly figures.

But with transactions up 11% on the year and 18% in July to September compared with the previous three months, Mr Middleton said "there is a clear upward trend in sales, demonstrating that market activity is looking positive overall".

A bald, bearded man in a suit in an estate agent's office
Estate agent Douglas Haig says some buyers are holding out for lower interest rates

Douglas Haig, who runs James Douglas Sales and Lettings which is based in south-east Wales, said the market over the past few years had been "fairly subdued", but there was "a little bit more optimism", especially among first-time buyers.

But he said there was more caution at the higher end of the market where "buyers are holding out and waiting for those interest rate drops that I think we’re all anticipating".