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New homes market enjoys price surge

New homes market enjoys price surge

Category: Mortgages

Updated: 16/02/2012
First Published: 16/02/2012

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 It is now over 6 months old so the content may be out of date.

The average price placed on new homes enjoyed positive annual growth for the first time since 2006 last year, new data has revealed.

According to SmartNewHomes, the average asking price for a new home in December was £227,098, some 1.2% higher than in November, and contributing to last quarter 2011 growth of 2.6%.

Significantly, however, it meant prices had increased by an average of 3.2% during 2011 as a whole, making it the first calendar year to see positive growth since 2006.

The average price of a new home is now £7,029 higher than at the end of 2010.

While the survey provides further evidence of increasing price stability in the new homes market, prices fell in the wider market in the final three months of the year as sellers reappraised their prices to more realistic levels.

As a result, asking prices in the new homes market are now more than in the wider market for the first time since March 2009.

Elsewhere within the report it was revealed that the number of new homes coming onto the market fell consecutively in the three months to December as house-builders delayed new development and phase launches until the New Year.

Despite the slowdown, annual growth still amounted to 10.2%, confirming the trading updates from some of the UK 's biggest house-builders which showed that build completions in 2011 were up year-on-year.

"Unwavering buyer demand in the run-up to Christmas and more readily available finance, particularly for first time buyers, meant that the new homes market recorded a robust level of growth last year, reversing the trend for annual price falls seen at the end of each calendar year since 2006," said Steven Lees, director of SmartNewHomes.

"The new homes market outperformed the wider market in 2011 with our own research revealing that homeowners now prefer properties with a contemporary design and which better cater to modern-day needs.

"Although prices have increased, house-builders have maintained affordability for buyers by introducing a range of new mortgage products and the industry is currently working with the Government on its new mortgage indemnity product to be unveiled this year."

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