Gwynedd house prices plunge as council acts on second homes

According to the latest data from Principality Building Society, house prices in Gwynedd, northwest Wales, have fallen by more than 12% year-on-year. This drop is the largest annual decrease of any region in the Wales House Price Index, which covers residential property sales in the last three months of 2024. The average house price in Wales is essentially flat, currently standing at £233,194.

Cyngor Gwynedd (Gwynedd Council) recently introduced a new rule requiring planning permission to convert residential properties into second homes or holiday lets. Furthermore, the council is one of many in Wales that levies a 150% council tax on such properties. Cyngor Gwynedd stated that its goal is to "increase the supply of high-quality housing that is affordable for local residents."

Tom Williams from Lancashire and his family are struggling to sell their second home in Morfa Nefyn, Gwynedd. Mr. Williams has owned the house for 20 years, saying, "My four grandchildren have wonderful times there every summer, and we've always loved it." The Williamses put the house on the market in April 2024 but say there has been little interest from potential buyers despite a £40,000 price reduction.

Mr. Williams believes that some of the local council's interventions have prompted many people to sell their properties while also deterring potential buyers. "I've spoken to a lot of families there who have had properties for generations, and they're all expressing the same concerns – how can we continue?" Gwynedd has been struggling to address the housing shortage for local residents in tourist areas and has more than doubled council tax on second homes and holiday homes. The council also recently introduced Article 4, requiring owners to obtain planning permission to convert a residential property into a second home or holiday let.

Dafydd Hardy, an estate agent in northeast Wales, described Gwynedd's property market as "mixed," with intervention in the second home market leading to "more properties coming onto the market." However, he stated that second home prices are often "beyond the reach of local buyers." "We need to see a balance in the market," he said, including "building more houses for first-time buyers." Iain Mansfield of Principality Building Society said that the Welsh housing market has shown "resilience" over the past 12 months. Sales are up 28% year-on-year, and Mansfield said this shows "increased consumer confidence" and that lower rates make mortgages more affordable. "I think we're seeing a more optimistic outlook for those looking to buy in 2025."

Mansfield said that the "significant" drop in house prices in Gwynedd over the past 12 months is reflected in "some other coastal areas of Wales." He said this decline "could" be explained by "some of the interventions that have been taken around second home ownership in that area." Cyngor Gwynedd stated that "over 65% of Gwynedd residents are unable to afford housing" and that addressing the housing shortage is a "priority." The council said they introduced Article 4 to "better control the existing housing stock" and that they are "constantly monitoring its impact." They added that some of the funds raised from the council tax premium are used to "develop new homes, provide supported housing for those facing homelessness, and grants and loans to help local residents access housing, as well as many other projects."