South Wales Residential Market Update – March 2024

Posted on: 27th March 2024 | Filled under: Property Market News
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In our latest market update, we delve into the current state of the residential property market across South Wales. From owner-occupier trends to property investor behaviours, here’s what’s happening in our region.

The Owner-Occupier Market

There’s a strong presence of first-time buyers and owner-occupiers, particularly in the more affordable segments of the market. Modernised or well-presented properties, especially those in good condition, are seeing significant interest. Three-bedroom homes, in particular, are selling well. 

However, the market for properties requiring substantial updates has diminished, partly due to increased mortgage costs and the need for larger deposits, which leaves potential buyers with less budget for renovations.

A notable challenge for those looking to undertake property refurbishments is sourcing reasonable building quotes. 

This is largely due to a shortage of labour and a substantial rise in the cost of materials, with timber prices notably increasing. This situation has made it increasingly difficult for individuals to undertake property projects, given the higher costs compared to just a few years ago.

The Investment Market

The residential investment market, particularly the landlord buy-to-let sector, is experiencing a downturn. 

Higher interest rates, changes to tenancy agreements, and the eviction process have all contributed to investors’ decreased appetite. 

A significant number of landlords are exiting the market, and those who are selling tenanted properties are finding that these homes fetch lower prices compared to vacant ones. Investment offers are often based more on the property’s yield than on its market value.

The Leasehold Flat and Apartment Market

The leasehold flat and apartment market is currently not benefiting from any uptick in interest. 

Concerns over fire regulation failures and rising service charges have weakened demand for many developments. Fire regulations have become more prevalent, with an increasing number of blocks requiring significant work. 

Additionally, the sales of many apartments have fallen through, often due to solicitors’ dissatisfaction with the responses from freeholders regarding various inquiries.

A secondary concern in this segment is the high proportion of buy-to-let owned properties in many blocks, which can lead to social noise issues, further diminishing their appeal to owner-occupiers.

Conclusion

As we observe a flat to slightly declining market in some segments, it’s clear that the South Wales residential property landscape is facing various challenges. We will continue to monitor these trends and provide further updates in the next quarter, offering insights into the evolving market.

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