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Summer lull for new home prices

Summer lull for new home prices

Category: Economy

Updated: 22/08/2011
First Published: 22/08/2011

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 It is now over 6 months old so the content may be out of date.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 of a new home fell by 2% in July, compounding the first price fall of 2011 that was witnessed in June.

The drop means the average price of a new home last month stood at £220,788, compared with £225,317 in June, according to SmartNewHomes

But despite the recent stalling of the market, growth remained positive on both a three-month and annual basis, rising 0.5% and 1.4% respectively.

As a result, the price of a new home is now £3,128 higher than in July last year, evidence, the website said, of the resilience of the new homes market.

Although annual growth has fallen back to 1.4%, down from 3.4% in May and June, this is considered to be indicative of the 'traditional lull in demand for property from buyers during the summer months and housebuilders incentivising sales'.

Steve Lees, director of SmartNewHomes, said that as had been predicted, buyers have opted to delay the hunt for a new home until the autumn, with housebuilders pricing competitively in order to sustain momentum in a quieter market.

"There are some excellent deals to be had, especially for those buyers who start their search now," he added.

"We expect buyer activity to resume in September, especially as the Government's new shared equity scheme, FirstBuy, launches at developments across the country.

"The Government has made some moves to help ease the UK 's chronic housing shortfall and while mortgage finance has improved and the threat of a bank rate rise recedes, strict lending criteria remains an obstacle to short-term market recovery."

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