HOUSE prices across west Wales have fallen over the last year, new figures reveal.

The average house price in Wales has dropped by 1.2 per cent in the second quarter of 2023 compared to the first three months of the year, according to Principality Building Society’s Wales House Price Index.

This means the average price of a house in Wales is now £242,076.

Homes in Ceredigion have taken a four per cent fall to £260,877 in the second quarter of the year, while house prices in Carmarthenshire dropped 2.9 per cent over the quarter to £223,872.

This equates to a two per cent fall in Ceredigion compared to the same point last year, while house prices are unchanged in Carmarthenshire compared to last year.

House prices in Pembrokeshire went up by 1.7 per cent in this quarter compared to last, but this was not enough to arrest an annual 1.9 per cent fall to £261,269.

The Wales-wide fall in prices during this period represents the second consecutive quarterly fall in 2023, and the average house price in Wales is now less than one per cent higher than it was at this stage last year.

According to Principality, the number of house sales during this three month period is down five per cent on the first quarter of 2023, and down 24 per cent on this time last year.

Shaun Middleton, head of distribution at Principality Building Society, said the fall in the number of sales was due to interest rates continuing to rise, along with the increased cost of mortgages.

“In spring we saw a few signs that market sentiment was recovering, after being hit badly by the turmoil following the UK Government’s autumn mini-budget.

“However, activity in Q2 has been a little weaker than in Q1 and further weakness now seems likely.

“This picture is repeated across Wales, with the significant majority of local authorities reporting price falls in the latest quarter, as well as year-on-year.”

When comparing average price by property type in Wales, detached homes are the only type maintaining a slight increase year-on-year with a 0.7 per cent annual rise to a new average price of £360,302.

The average prices for semi-detached homes have fallen annually by 1.1 per cent to £219,460, terraced homes have fallen by one per cent to £171,546, and flats have fallen by four per cent to £154,508 when compared to the same period last year.

Mr Middleton said: “Our last outlook offered up a modestly optimistic view of the future based on the market expectation that interest rates were nearing their peak.

“However, since then, to fight inflation, the Bank of England has continued to raise the base rate with a 0.25 per cent rise in May and a 0.5 per cent rise in June (so currently standing at five per cent).

“Financial markets are now expecting further rises, continuing throughout 2023 and into 2024, perhaps peaking at 6.5 per cent.

“Constant rate rises have led to mortgage product repricing, and inevitably this has been disruptive.

“Higher rates also impact the amount people can afford to borrow, as a result sellers have found it harder to attract buyers and some have been forced to offer discounts and lower their expectations in order to secure sales.

“While few are forecasting a full-scale housing market recession, it is quite clear that the market is becoming more difficult.”