Nigel Jones, director of John Francis, Swansea's largest estate agency, looks at the latest reports on the UK's housing market and what they mean for buyers and sellers in south West Wales:
There have been lots of good news stories about the housing market in the press recently, and statistics show that things are on the up in Wales.
Two reports have been published in April alone showing that house prices in Wales are increasing. Nationwide's House Price Index, published at the start of April, showed that the average house price in Wales had risen 5.2% on this time last year, and the Office for National Statisticsown House Price Index put this increase at 5.3%. This is part of an upward trend in house prices across the UK, as the recovery begins to gain momentum.
While our housing market is improving, figures such as these need to be taken with caution. There will always be fluctuations across different regions, towns and cities, and these reports do not necessarily reflect what is happening across the whole of the UK, or even across all of Wales. For example, in Swansea, sales are up 33% on the same time last year, but we are yet to see this demand spark an increase in the value of properties in the region.
That being said, there are undoubtedly some positives happening in our area. While some properties are still taking time to sell, houses are generally selling more quickly, and sellers are getting closer to their asking prices. The market in south west Wales may not be quite as rosy as these reports suggest, but it is on the rise.
I also think warnings that we are on the edge of a housing "bubble" are not entirely assured. There are concerns about a lack of new properties coming on to the market, something we are indeed seeing in south west Wales. This can lead to an imbalance between supply and demand that pushes up prices; something first-time buyers who are already struggling to get on the ladder will be particularly keen to avoid. However, while these warnings should be acknowledged they are by no means certain and buyers should not be put off. I remember rumours of a housing market crash a few years ago which didn't end up happening.
There are other issues around the corner that we aren't yet able to predict the impact of. For example, one of the effects of an improving economy is higher interest rates and in turn, higher mortgage payments. How we will manage these is yet to be seen.
Another issue is the knock-on effects that improvements in one market sector may have on others. For example, people who have been renting their property may now be in a stronger position to sell it. This could lead to greater competition in the rental market, as fewer properties become available.
My advice would be to have confidence but proceed with consideration. Make sure you think realistically and get good advice from your agent. Above all, remember, these reports are good news - the market is gaining momentum and good opportunities are out there for buyers, as long as they tread carefully.