New home prices surge

The final quarter of 2006 saw the average price for a new home surge, according to SmartNewHomes.com New Homes Index. While prices across the market as a whole experienced a fall in December, new home prices bucked the trend, up 0.1% on the previous month and 2% over the final quarter of 2006.

Semi detached proves home of 2006

While other property types suffered in December, the semi detached retained its popularity, experiencing the biggest price growth over the last year. Despite its increasing price the semi detached home still remained one of the most affordable property types in 2006, beaten in price only be the apartment.

How much home buyers indicate they are willing to pay for a new home.

While the price of a new home (stock price) has fluctuated throughout 2006, the price buyers are willing to pay (demand price) had been growing steadily, up 5.8% over the last year - reinforcing continued consumer confidence in the new homes market.

New home prices finished 2006 on a high, with prices growing steadily in the final quarter of 2006 and finishing 2% higher than the previous year, indicating renewed demand and a strong start to 2006.

The first quarter of 2006 got off to a slow start for the new homes market, with annual prices falling below those experienced at the same time the previous year. However, a surge in prices in March reversed this trend and introduced three consecutive months of positive price growth. The new homes market experienced a considerable slow down over the summer months, with apartments flooding the market and fewer consumers looking to purchase a new home. However, new home buyers returned to the market in the final quarter of 2006 with renewed vigour, resulting in a positive end to the year.

West Midlands experiences biggest price fall

The West Midlands experienced the biggest fall in house prices in 2006, with prices down 5.4% since the previous year. The increasing number of apartments that have emerged in major cities such as Birmingham, have contributed to this fall - apartments proving the least expensive property type in the mix hence pulling down the average price.

Migration

Scotland proved the most popular destination for new home buyers in 2006, with more people looking to move into the region than anywhere else in the UK, and inward migration up, to 4.8%. With this growing popularity has come growing prices, making Scotland the third most expensive place to buy a new home after London and the South East in 2006. Prices have grown 13% over the last year, an increase only matched by London, which recorded a price growth of 17%.

The West Midlands proved the least popular destination for new home buyers, with outward migration of 10.4% and annual prices experiencing the biggest fall over the last year, down 5.4%, as more new home buyers look to nearby areas such as Wales and the North West where prices are still more competitively priced.

Property Types

Despite a surge in the development of new apartments in the earlier months of last year a later slow down has resulted in an overall stagnation, with the proportion of apartments remaining at 56% in 2006.

The number of detached properties in the mix fell 5% in 2006, with only townhouses and semi detached homes increasing their presence. Townhouses recorded the highest growth of 4% as they continued to prove popular with young families.

Aside from penthouses, new semi detached homes recorded the biggest price growth in 2006, with prices up 12.4%, making them the most sought after property of last year.