Welsh house prices steady as sales surge

What is the data telling us?

The average price of a home in Wales was £238,098 in the second quarter of 2025, up 0.7% year-on-year and just 4.6% below its peak of £249,000 in 2022.
The figures have been released by Principality Building Society in its Wales House Price Index for Q2 2025 (April - June), which demonstrates the rise and fall in house prices in each of the 22 local authorities in Wales. 
Despite ongoing affordability pressures, the steady rise in the number of transactions – which reached over 10,000 in Q2 (up 13% on last year) – suggests growing buyer confidence despite persistent cost-of-living challenges and elevated rates.

Changes by local authority 

Torfaen recorded the highest quarterly price change of any local authority at 14%, driven by periodic high-value sales and limited housing supply. Carmarthen also reported an increase of 6.3%, while Flintshire saw a 3.3% quarterly rise.
Other areas, including Gwynedd, saw prices fall in Q2, dropping 7.3% from the first quarter of 2025. A drop likely influenced by policy shifts such as the Welsh Government’s adjustments to second home taxation and the impact of new planning regulations.
Principality Building Society’s research, based on HM Land Registry data, reveals that Q2 is the fourth consecutive quarter with more than 10,000 sales, suggesting property sales are showing signs of recovery.

A word from our Chief Financial Officer

Speaking about the Q2 House Price Index, Iain Mansfield, Chief Financial Officer at Principality Building Society, said: 
“The housing market in Wales continued to stabilise in the second quarter of 2025, with prices holding broadly flat compared to the start of the year. Encouragingly, the steady increase in transaction volumes signals increasing confidence among buyers. While market conditions remain challenging, a downward trend in mortgage rates is helping to create a more favourable environment for buyers. This shift is contributing to a gradual uplift in consumer confidence as we move into the second half of 2025.”

Affordability and supply challenge

The Bank of England base rate cuts is anticipated to drive further affordability for buyers in Wales, contributing to the increase in property transactions against a backdrop of rising rental rates. Compared to the same period last year, the average two-year fixed mortgage rate has dropped from approximately 5.56%*  to around 4.68%*  in 2025. While house prices remain stable year-on-year the cost of renting the average home has increased by 8.5% in the 12 months to May . 

Housing supply remains a key challenge in Wales and across the country, particularly affordable and social housing. Policy changes including the Welsh Government’s commitment to increasing the supply of affordable homes and plans to implement the recommendations of its Affordable Home Taskforce aim to address ongoing supply challenges and ease pressures on the housing market. 

This regional commitment is also reflected at a national level, with the UK Government demonstrating its intent through the Chancellor’s announcement of a £39bn investment in affordable and social housing over the next decade.

Principality as part of the solution

Iain continues: “As a business, we remain focused on being part of the solution when it comes to the demand pressures within the Welsh housing market. As of this year, we’re proud to support 19 of 32 housing associations in Wales – aiming to remove barriers to help support everyone to have a place to call home.

As the report demonstrates, price growth has eased this quarter. Looking ahead, we expect the market to gain momentum. A significant factor will be improving affordability which goes hand in hand with consumer confidence increasing – especially for first-time buyers – driven by falling interest rates and more favourable mortgage terms, likely boosting demand. 
With demand rising and supply remaining a challenge for buyers across the country, we anticipate renewed market activity in the second half of the year.” 

*Philips, "Biggest Monthly Drop In Two-Year Mortgages"  Moneyfactscompare (2024)
*Hammond, "What Are The UK Mortgage Rates Today?" Uswitch (2025)
*Private rent and house prices, UK - Office for National Statistics (2025)