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New home values holding their own

New home values holding their own

Category: Mortgages

Updated: 25/03/2011
First Published: 24/03/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Resilience is characterising the new homes market despite the uncertainty which is haunting the property market as a whole.

The latest research from smartnewhomes.com revealed the average price of a new home stood at £219,172 in February, 1.6% higher than in January.

Although values continue to fluctuate on a month-by-month basis, the property website said nervous homebuyers should be reassured by the medium-term average, which has stayed steady at approximately £217,500.

While concerns about mortgage availability and job security remain, the latest figures suggest the new homes market may prove more resilient than some analysts have predicted.

The regional picture also supports the overall national view that the new homes market is holding firm in a difficult economic climate, with many areas seeing positive price swings.

Steve Lees, director of SmartNewHomes, said the increase in the average price of a new home in February will come as a surprise to the hawks who have been warning of a weakening in consumer sentiment.

"Public policy has caused the rate of development to lag behind consumer demand for many years now, so while the economic outlook remains uncertain, there remains a significant level of pent-up demand in the market, which should help to support sales," he added.

"Having said that, the nature of the property market is such that consumer demand is always mediated by the mortgage industry, and developers remain wary that current highly restrictive lending practices may continue to hold back the market.

"The reaction of the mortgage market to a possible rise in interest rates, which is looking increasingly likely at some point in the coming months, will act as an important barometer for the medium-term outlook of the new homes market."

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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