Blog post by Rob Simkins, Shelter Cymru Campaigns Manager.
When thinking of ownership and land price issues in Wales, it is easy to immediately be drawn into thinking in terms of sprawling country estates, rural landscapes and the influence of landed elites and so on. But the truth is that land ownership and the increasing value of land is also driving the housing crisis which we face today, in rural and urban areas.
Research released late in 2020 from the Principality Building Society shows an increase in house prices across Wales by 3% annually. ‘So what?’ I hear you ask. Hardly much to write home about – however when you dig for the detail beneath the headline, you’ll strike some stats which will make your jaw drop.
Across the vast majority of local authority areas in Wales there were increases, with a few exceptions. However, the rises in some areas, particularly in areas with higher levels of tourism, are stark. For example, in a three-month period between July and September parts of Wales saw unbelievable hikes in house prices to the tune of:
- 14.6% in Gwynedd (up 8.1% annually)
- 10.7% in Pembrokeshire (up 4.4% annually)
- 8.9% in Carmarthenshire (up 5.1% annually)
Just let that sink in for a moment. House prices in Gwynedd rose by 14.6% in just 12 weeks.
The average increase for Wales in this period was merely 2.2%. But how does this play out to people’s pockets? Well, at the end of June you could get yourself a lovely detached house in Gwynedd for £250,000. By the end of September, you’d be adding another £30,000 to that figure.
Now even in more normal times these developments would be big news and have some very serious consequences for would-be homeowners in Wales – but when we are in an economic crisis with unemployment on the rise, these changes present some real issues for people and communities across many parts of Wales.
In their research, the Principality detail how many of the properties being bought are larger and more spacious, suggesting that this reflects a market which is beginning to favour larger homes with more space (including outdoor areas) over proximity to the workplace. This is likely to be in anticipation of remote working becoming more of a feature of our lives in future, as research shows that a 10% increase in income (perhaps by a diminished cost of commuting) leads people to spend about 20% more on house and garden space . There is a growing trend of people quitting the big city in favour of attractive rural or coastal areas, now that commuting is less important than it used to be, and this is pushing up prices for existing communities.
In addition to this, we may be facing a second home surge across desirable “bolt holes” in the UK due to stricter rules on second homes in the EU which have come into force as of 2021.
This heating up of the property market presents an immediate challenge to the current and future Welsh Governments, and will likely be pivotal for many communities, rural and urban in the upcoming Senedd elections in Spring 2021. We are looking at the reality of rampant, unregulated gentrification which could see more and more parts of Wales become nothing more than winter ghost towns. We are looking at rising inequality, with local people and key workers priced out of more and more areas.
The housing crisis in Wales is well documented as it is. With renters set to overtake homeowners (especially within younger demographics) within the next decade or two, the prospect of owning your own home has never seemed further away for some people.
Central to addressing the housing crisis in Wales will be addressing land prices – and whilst this might seem like an issue for predominately rural areas and affluent people, in truth, land affects all property prices across Wales, from Cardiff City Centre to the Ceredigion coastline. Given that land is finite and crucial to all aspects of the economy, it often represents a good investment and as such can contribute to the boom and bust cycles we have been used to in the UK housing market since the 1970s. Whether attractive land rooted near economic hubs of city and town centres, or land in a previously depressed area which is now considered an investment, it is in all of our interests for the land market to be more effectively regulated so as to mitigate its dramatic effects on the housing market.
At Shelter Cymru, we share these concerns and this is why we are starting detailed and collaborative work to design a range of solutions to this crisis. Because we believe that in Wales, everyone should have the right to an affordable home.
If you want to get involved and help our work, then you can find out more here.