The housing market in the UK has been on the steady rise with average home prices growing at a rate that makes it increasingly difficult to afford—especially with the financial impact of the pandemic on many families.
In several parts of Wales, many locals are being vocal about the ‘absolutely crazy’ prices of properties on the housing market, according to campaigners. Rhys Tudur, council chair in Nefyn Town said the average price of houses in the area has become too expensive for local residents, citing an example of a property in Gwynedd that sold for more than twice its asking price of £120,000.
Several residents have help public events in places like Aberdaron, Morfa Nefyn, and Pistyll to protest the worrisome trend. In response, the First Minister of Wales, Mark Drakeford, has committed to helping local people who are trying to purchase homes overcome the current challenges they face in the housing market.
In the first series of protest held last month, 50 residents in Pistyll gathered to protest the current housing market prices with many holding signs that read “no more second homes”.
“The prices are absolutely crazy,” said Tudur in a report.
Recently, a village church building was sold for £275,000—a rate that was far higher than the initial asking price of about £120,000, said Tudur in a report.
“It’s so sad that you can be raised in a community, to feel love towards that community, and then the door gets slammed shut in your face because the houses are too expensive for you to live there,” he continued.
To curb the disturbing trend, the Welsh government is already proposing solutions and making plans, some of which involves taxation, said Drakeford. These plans would help those who are struggling to reside in their hometowns due to expensive property prices, he added.
“It will be some measures to do with the way we tax property sales, there’ll be measures to do with planning – rights local authorities will be able to use,” said Drakeford while admitting that these are not perfect solutions.
For anyone buying a property in Wales, rather than paying a stamp duty land tax, they’re required to pay land transaction tax (LTT). From now till the end of June, homes worth as high as £250,000 are excluded from paying it, after the government removed the mandatory 3.5% tax on houses priced above £180,000.
However, for houses priced above £250,000, you would have to pay a 5% LTT and the more expensive the property, the higher the rates. Homebuyers would need printable amortisation schedules to keep track of the amount of principal and the amount of interest that makes up each mortgage payment.
The Help to Buy program by the Welsh government has helped a lot of local residents buy new houses that cost as high as £250,000, provided they have a minimum deposit of 5%. The government then helps to fund the purchase by providing a shared equity loan of about 20%.
Additionally, the Welsh government is making plans to build 20,000 low-carbon homes across the country in fulfilment of its pledge towards providing high-quality and affordable homes to everyone.