The average house price in Wales fell by 0.7 per cent on a quarterly basis in Q2 this year, with a 66 per cent fall in transactions also noted in research from Principality Building Society.

On an annual basis prices rose 2.2 per cent, bringing the average house price to £191,880.

Carmarthenshire saw the largest quarterly drop in prices, recording a 9.1 per cent fall to give an average house price of £156,126, followed by an 8.4 per cent quarterly fall in Pembrokeshire, moving the average house price to £193,629.

The Vale of Glamorgan houses the biggest rise – here prices moved up by 14 per cent, bringing the average house price to £300,903.

Merthyr Tydfil saw the second largest quarterly rise – 6.8 per cent to leave the average house price at £135,108.

The lender reports that many observers expect prices to continue to rise in the third quarter of the year, in part because of the increase in the land transaction tax threshold from £180,000 to £250,000 adding to demand.

Principality interim chief executive Mike Jones says: “We remain cautious about how we interpret average house price data for Q2 because sales are down by more than 60 per cent compared with the same period in 2019.

“The temporary increase in the land transaction tax to help first time buyers in particular, is likely to stimulate the market in the short-term, along with increased levels of activity following the easing of lockdown restrictions.

“However, once the UK government furlough schemes come to an end in October, there may well be a rise in job losses and this, in turn, is likely to have a negative impact on consumer confidence in general. If this happens, then we would expect to see lower levels of activity in the housing market across the UK, and not just Wales.”