Estate Agent Dylan Williams of West Wales and Swansea estate agent, Rees Richards, shares his predictions for the 2018 Property Market in Wales.
Unlike much of the UK, Welsh property prices have risen steadily throughout 2017, along with buyer enquiries. The RICS reported in September that 47% of welsh surveyors reported buyer enquiries had increased in the past three months.
The most popular properties sold in the principality in 2017 were 2-3 bedroom properties, and most of these were sold to first time buyers.
We expect demand to increase again in early 2018, boosted by the stamp duty relief for first time buyers, which will be replaced by the new Welsh Land Transaction Tax in April 2018. We therefore expect to see a rush to completion from first time buyers in Wales before the end of March, especially on entry level properties costing more than £125,000 before the LTT comes into force.
LTT is the biggest change for property in Wales in 2018, and details of the new Land Transaction Tax Rates for buying property in Wales can be found here.
As one of the few Swansea Estate agents who specialize in high-end property, covering affluent areas like Mumbles and the Gower, we are gearing up for a rush of completions before April at the top end of the market for the same reason. People buying homes in Wales costing more than £400,000 will be hit hard by the LTT, in fact someone buying a large house in Wales could end up paying up to £17,500 more in tax than they do under the rates that apply in England. Our advice to buyers wanting to buy at the top end of the market is to get moving fast. We have some fantastic properties for sale from £400,000 upwards (link to property list), early offers are advised, because there will be no leeway on the 31st March LTT deadline.
Like the rest of the UK, we expect to see sales for buy-to-let decreasing, because the new rules that came into force in September, coupled with high property tax rates for second homes and buy-to-let (under both stamp duty and buy-to-let). However, as Welsh property is so cheap compared to many parts of England, we don’t expect to see Welsh buy to let landlords selling up, unlike some of their counterparts in England, because many of them will still make a good return on their investment.
Like many in my profession, I believe the Welsh Government lost a valuable opportunity for progressive land tax reform with the LTT, which is effectively just Stamp Duty with different rates and a new name. I’m still looking forward to the day when property buyers are no longer taxed just for buying a home, irrespective of income – it seems a little outdated.
I however look forward to seeing how the new LTT works in practice, and am grateful at least that the proceeds raised as a result will be spent in Wales.