The housing market in Gwynedd, north-west Wales, is facing a sudden downturn with house prices plummeting by over 12% year-on-year. The local council’s crackdown on second homes and holiday lets has led to a significant drop in property values.
The local authority in Gwynedd, north-west Wales, has introduced measures to crack down on second homes and holiday lets. As a result, house prices in the county have fallen by more than 12% year-on-year.
Cyngor Gwynedd, the local council, aims to increase the availability of high-quality, affordable homes for local people. To achieve this goal, they have introduced a requirement to obtain planning permission to turn residential properties into second homes or holiday lets. The council also charges a 150% council tax premium on such properties.
According to the United Nations, approximately 1.6 billion people worldwide live in informal settlements, lacking access to affordable housing.
In developed countries, the issue is more nuanced, with rising costs and gentrification pushing low-income residents out of neighborhoods.
The concept of affordability varies by region, but generally refers to homes costing no more than 30% of a household's income.
Governments and organizations are exploring innovative solutions, such as community land trusts, inclusionary zoning, and affordable housing subsidies.
The introduction of these measures has had a significant impact on second home owners in Gwynedd. ‘We’ve reduced the asking price by £40,000 but still have little interest from potential buyers,’ said Tom Williams, who lives in Lancashire and owns a second home in Morfa Nefyn, Gwynedd.
Second home ownership has become increasingly popular in recent years, with many individuals and families purchasing a second property for various reasons.
According to a survey by the National Association of Realtors, over 9 million U.S. households own a secondary vacation or investment property.
The most common motivations for buying a second home include retirement planning, investment opportunities, and family vacations.
Second homes can also provide rental income and tax benefits for owners.
Dafydd Hardy, a North Wales estate agent, described the housing market in Gwynedd as ‘mixed’. He said that local interventions on second homes had led to more properties coming onto the market. However, he also noted that the price of a second home was often outside the affordability of the local purchaser.
The new figures are based on seasonally-adjusted data from the Land Registry, but there is uncertainty about what caused the drop in prices in Gwynedd. Factors such as interest rates, regional job opportunities, and interventions in the local housing market by a council can all have an impact on house prices.
Gwynedd, located in northwest Wales, has experienced a significant increase in house prices over the past decade.
According to data from the Land Registry, the average house price in Gwynedd is around £170,000.
The region's popularity among buyers is driven by its stunning natural beauty, with many seeking homes near the coast or in rural areas.
Statistics show that property values have risen by 20% in the past year alone, making it an attractive investment opportunity for some.
However, this growth also poses affordability concerns for local residents and first-time buyers.
Pembrokeshire saw the second biggest annual fall in prices at 8.9%. The council there recently voted to reduce the ‘council tax premium from 200% to 150%’. By comparison, Carmarthenshire saw the biggest year-on-year increase in house prices at 9.2%.
Iain Mansfield, of the Principality Building Society, said that the housing market across Wales had shown ‘resilience’ over the past 12 months. Sales were up by 28% year-on-year, which Mr Mansfield attributed to greater consumer confidence and lower interest rates making mortgages more affordable.
Mr Mansfield noted that the sizeable drop in prices in Gwynedd over the past year was reflected in some of the other coastal areas in Wales. He said that the drop could potentially be explained by some of the interventions made in the area around second home ownership.
Cyngor Gwynedd stated that over 65% of Gwynedd’s population was priced out of the housing market and tackling the housing shortage was a key priority. They introduced Article 4 to gain better control over the existing housing stock, and they are continuously monitoring its effects. The council also added that some of the money raised by the council tax premium is used to enable the development of new homes, create supported accommodation for those facing homelessness, and provide grants and loans to help local people secure housing.
