"Despite a challenging economic backdrop, we’re seeing year-on-year growth in transactions, spurred by supply challenges and falling rates"
- Iain Mansfield - Principality Building Society
The average price of a home in Wales reached £238,413 in the first quarter of 2025, reflecting a 2.2% increase from the previous quarter and a 4.0% rise compared to the same period last year.
This data, from Principality Building Society’s Wales House Price Index for Q1 2025 (January - March), highlights the rise and fall in house prices across the 22 local authorities in Wales. While affordability challenges persist, the steady growth in prices and the number of transactions – which totalled 10,000 in Q1, up 20% year-on-year – indicates that buyer confidence is rising despite ongoing cost-of-living pressures, elevated interest rates, and global economic uncertainty.
Regionally, there’s a varied picture, with some areas seeing significant price increases. In South Wales, three authorities hit record highs in house prices, with Bridgend leading the way, reporting the highest annual change at 11%. Blaenau Gwent followed with a 6.8% increase, and Caerphilly saw a 6.6% rise.
However, some areas saw declines, such as Ceredigion, where prices dropped by 10.1% from Q4 2024. Year-on-year, this region experienced a decrease of just over 3%, with experts attributing this drop to policy changes like adjustments to second-home taxation by the Welsh Government.
On a broader scale, Principality Building Society’s research, based on HM Land Registry data, shows that the decline in regional house prices has eased over the past three quarters, offering signs of stability for both buyers and sellers in a shifting market.
“The housing market in Wales has had a positive start to 2025, with prices rising quarter on quarter at their fastest pace in over two years," comments the society's chief financial officer, Iain Mansfield. "Despite a challenging economic backdrop, we’re seeing year-on-year growth in transactions, spurred by supply challenges and falling rates. Meanwhile, affordability remains a key factor shaping the market landscape.”
A key driver of the year-on-year growth in transactions could be the ongoing supply issues, which have been evident over the last 25 years due to a significant decline in housebuilding in Wales. Policymakers are addressing this challenge with initiatives like the extension of the Welsh Government’s Help to Buy scheme, second-home tax adjustments, and plans to build more affordable housing.
Iain added, “Housing remains a high priority across Westminster and Wales. Looking ahead, the UK Government has committed to extensive planning reforms and a target to build 1.5 million homes over the next five years, which would represent a significant shift in the UK’s housing landscape.
"This, along with the Welsh Government’s Help to Buy Wales extension and a £10 million investment in housing schemes, shows that policymakers recognise the importance of housing for families across the country.”
He concluded, “Despite external pressures such as the cost of living, inflation, and global economic concerns, the housing market in Wales is moving forward positively, with increased consumer confidence and strong regional performance.”
