Press comment: ONS reveals south-east Wales gets house price boost
thanks to Severn Bridge scrapping tolls
13 February 2019
If you are covering the ONS UK House Price Index for December 2018, which reveals that house prices have increased in south-east Wales likely as a result of the abolition of tolls on the Severn Bridge, please see the following comment from Gemma Harle, managing director of the Intrinsic mortgage network , part of Quilter:
"An interesting aspect of the report today is quite how much house prices can be artificially boosted by changes to the local environment. The abolition of tolls on the Severn Bridge might have been one of the driving factors behind why house prices in south east of Wales have shot up. Simple man-made changes can impact house prices drastically, particularly when they have the south west hub of Bristol and Welsh capital Cardiff in close proximity. Affordable housing just across the river Avon now the toll is gone will become ever more desirable as an increasing number of people are priced out by the high house prices in Bristol.
"These kind of artificial boosts are massively needed at a time when the rest of country is suffering from the worst house price increases since 2013. Further afield we have seen major projects such as Crossrail do similar things to the price of houses close to its new stations. Other factors which can boost property prices include proximity to high quality schooling which according a 2017 report by the Department for Education (DfE) has found prices could add as much as £18,600 to the average house price in England. The research found that prices were 8% higher near the best-performing primary schools and 6.8% higher near the best secondary schools.
"Ultimately if we are going to see property prices continue to increase or at least stabilise, the fog of Brexit needs to clear so people have a better idea of how their assets will perform in the short to medium term. The lingering uncertainty of Brexit has hampered prices for the last year. The whole market has also been impacted by a cooling off of prices in the south east and London. Clearly under a politically unstable backdrop people can’t and won’t spend their money on over-inflated house prices in and around the capital, at a time where these prices could fall off a cliff. Instead, they are adopting a wait and see philosophy which might quickly change if we see a smooth transition out of the EU in just over a month."