New home prices take an upturn

The average price of a new home in May was up 0.7% on the previous month and up 0.3% over the last year, signalling a positive change in the market and leading a strong second quarter for the new homes market in 2007, according to Smartnewhomes.com.

Town houses take the lead

All property types across the new homes mix, with the exception of the penthouse, recorded a positive price growth in April, spearheaded by the town house which took the lead, recording a price growth of 2.1% over the last month.

Following strong growth in the average price buyers were willing to pay for a new home (demand price) over the last few months, the average price of a new home (stock price) has, as expected now reiterated this pattern, recording a marginal price growth of 0.7% last month.

The average price of a new home has now stabilised, recording a 0.7% increase in price over the last month, and a 0.3% increase over the last year, indicating a renewed buyer confidence in the new homes market and initiating further price growth in the second quarter for 2007.

While the new homes market has experienced positive price growth in April, this month’s decision by the Bank of England to increase interest rates to 5.5% could have a significant, slowing effect on the market, further dampening future price growth across the housing market.

Wales sets new records

Wales has recorded the strongest price growth across the new homes market in April, with average prices up 9.1% on the previous month and 4.8% over the last year, indicating a strong demand for new homes in the area. In contrast, London and the south east have continued to experience a series of price falls, in part explained by the increasing number of apartments being developed in these regions.

The SmartNewHomes.com migration monitor compares the number of homebuyers living in any one region to the number of homebuyers looking for properties in that area.

Scotland remains undefeated as the most popular destination for new home buyers. However, its popularity has been closely followed by the south west as more people look to move here or to invest in a second property which they plan to either rent out or to keep as a holiday property for friends and family.

The non coastal areas continue to prove less popular with new home buyers, as people look to move away from areas such as the midlands to surrounding, more affordable areas including Wales and Yorkshire.

Property types

SmartNewHomes.com records the type and price of properties currently available on the website, reflecting availability and patterns of building within the industry.

New apartments continue to dominate the new homes mix, falling in number only marginally over the last year and currently taking up 54% of the mix (previously 56%). All other property types have stabilised with only town houses increasing their presence within the mix, up 2% since the same time last year.

Detached and semi detached homes have experienced some of the biggest price growth over the last year, with average prices up 3.8% and 4.2% respectively - reinforcing the continued demand for suitable, family homes. Over the same period, the average price of an apartment fell, down 2.6%, as their continued dominance and oversupply in some regions takes its toll.