Gwynedd home costs plunge as council acts on second houses

Home costs in a county the place the council has launched measures to crack down on second houses have fallen by greater than 12% year-on-year, in response to new figures.

The native authority in Gwynedd, north-west Wales, just lately launched a requirement to acquire planning permission to show residential properties into second houses or vacation lets.

Additionally it is one among a variety of Welsh councils which costs a 150% council tax premium on such properties, having upped this from 100% in 2023.

The council, Cyngor Gwynedd, mentioned its purpose was to “improve the supply of high-quality, inexpensive houses for native individuals”.

The autumn in worth represents the largest annual drop of any area within the Principality Constructing Society’s Wales Home Value Index, masking residential property gross sales within the ultimate three months of 2024.

The typical home worth in Wales has remained broadly flat year-on-year and is now £233,194, in response to the constructing society.

Tom Williams and his household, who reside in Lancashire, are struggling to promote the second dwelling they personal in Morfa Nefyn, Gwynedd.

“I’ve 4 grandchildren who had a beautiful time there each summer time and it has been nice, we have liked it,” mentioned Mr Williams, who has owned the home for 20 years.

Mr Williams and his spouse put the home available on the market in April 2024 however mentioned they’d had little curiosity from potential consumers, regardless of dropping the worth by £40,000.

“I put it all the way down to all the opposite properties within the village which might be up on the market for the time being,” he mentioned.

Mr Williams believes a few of the interventions by the council have prompted lots of people to promote, whereas additionally pushing aside potential consumers.

Cyngor Gwynedd has been making an attempt to deal with the scarcity of housing for native individuals in vacationer areas and has greater than doubled the council tax cost on second and vacation houses.

The council additionally just lately launched Article 4, which requires property house owners to acquire planning permission to show residential houses into second or vacation houses.

“I’ve spoken to lots of households who’ve had houses there for generations and so they’re saying the identical factor – how can we stock on with this?” mentioned Mr Williams.

North Wales property agent Dafydd Hardy described the housing market in Gwynedd as “blended”, with native interventions on second houses resulting in “extra properties approaching to the market”.

However he mentioned the worth of a second dwelling was typically “outdoors the affordability of the native purchaser”.

“What we have to see is stability available in the market,” he mentioned, together with “extra home constructing so far as first-time consumers are involved”.

The brand new figures are based mostly on seasonally-adjusted information from the Land Registry, however lots of various factors can have an effect on the image that information finally ends up portray.

Elements equivalent to rates of interest, regional job alternatives, interventions within the native housing market by a council and even the variety of transactions can all have an effect on home costs.

It means there’s some uncertainty about what triggered the drop in costs in Gwynedd within the yr to December.

Pembrokeshire noticed the second largest annual fall in costs at 8.9%.

The council there just lately voted to cut back the council tax premium on second houses from 200% to 150%.

By comparability, Carmarthenshire noticed the largest year-on-year improve in home costs at 9.2%.

The council there’s introducing a council tax premium of 100% on second houses from April.

Iain Mansfield of the Principality Constructing Society mentioned the housing market throughout Wales had proven “resilience” over the previous 12 months.

Gross sales had been up by 28% year-on-year, which Mr Mansfield mentioned demonstrated “better client confidence” with decrease rates of interest making mortgages extra inexpensive.

“I believe we’re seeing a extra optimistic outlook for these individuals who need to purchase a home in 2025,” mentioned Mr Mansfield.

Mr Mansfield mentioned the “sizeable” drop in costs in Gwynedd over the previous yr was mirrored in “a few of the different coastal areas in Wales”.

He mentioned the drop might “doubtlessly” be defined by “a few of the interventions which have been made within the space round second dwelling possession”.

Cyngor Gwynedd mentioned “over 65% of Gwynedd’s inhabitants was priced out of the housing market” and tackling the housing scarcity was a “key precedence”.

It mentioned it launched Article 4 to “acquire higher management over the prevailing housing inventory” and so they had been “repeatedly monitoring its results”.

It added a few of the cash raised by the council tax premium was used to allow “the event of recent houses, the creation of supported lodging for these dealing with homelessness and grants and loans to assist native individuals safe housing, amongst many different tasks”.