Fresh figures point to a shift in buyer sentiment
The Welsh housing market demonstrated a period of stabilisation in the second quarter of 2025, with average house prices holding steady while property sales experienced a significant surge. According to the latest Wales House Price Index from Principality Building Society, the average price of a home in Wales reached £238,098 between April and June, marking a 0.7% increase year-on-year. This figure remains just 4.6% below the market’s peak of £249,000 recorded in 2022.
Despite persistent cost-of-living challenges and elevated interest rates, buyer confidence appears to be on the rise, evidenced by a notable increase in transaction volumes. The second quarter saw over 10,000 property sales across Wales, a 13% increase compared to the same period last year. This marks the fourth consecutive quarter with sales exceeding the 10,000 mark, suggesting a sustained recovery in the property market.
“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,” said Iain Mansfield (pictured), chief financial officer at Principality Building Society.
While the overall market stabilised, regional variations were observed. Torfaen recorded the highest quarterly price change, surging by 14%, largely attributed to periodic high-value sales and limited housing supply. Carmarthen also saw a 6.3% increase, and Flintshire a 3.3% rise. Conversely, areas like Gwynedd experienced a 7.3% drop in prices from the first quarter of 2025, possibly influenced by policy shifts such as adjustments to second home taxation and new planning regulations by the Welsh Government.
The report also highlighted improving affordability for buyers, driven by falling interest rates. The average two-year fixed mortgage rate has decreased from approximately 5.56% last year to around 4.68% in Q2 2025. This contrasts with the cost of renting, which has increased by 8.5% in the 12 months to May. Housing supply, particularly affordable and social housing, remains a key challenge across Wales, with both Welsh and UK governments outlining commitments to address this issue.
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