The new homes market is exceptionally strong heading into the spring months, reports Linden Homes.
The housebuilder has experienced record sales so far in 2007, which are 55% higher than during the same period last year.
Almost 2,000 potential customers visited Linden Homes developments in January and February, resulting in 222 sales compared to 143 sales in the first two months of 2006.
Investors are remaining extremely active in the town centre apartment market, despite the recent interest rate rises and the prospect of a further rise before the end of the year.
Annual house price growth hit 9.9% in January 2007 with the average home in the UK now costing £188,623 according to Halifax, which is driving investors to continue expanding their portfolios despite rising borrowing costs.
First-time buyers too are increasingly choosing easily maintained new build homes over second hand properties.
With lenders increasing income multiples, the initial cash required to buy a first property is more of a barrier for many first-time buyers than affordability, and the new homes sector can often assist through deals and incentives such as Stamp Duty or deposit paid, which will reduce the initial cash required.
Chris Coates, regional director of Linden Homes, says: “The fact that the new homes market is stronger than ever after three interest rate rises, demonstrates the extraordinary demand for new homes in the UK and highlights the shortage of land for development.
“Until the government and local councils take significant steps to free up land for development, allowing housebuilders to really tackle the housing shortage, there will be continued high house price inflation and a worsening crisis for first-time buyers.
“While a further interest rate rise to 5.5% this spring would undoubtedly have an effect on first-time buyers, I would not expect to see a significant decrease in market activity.”
While visitor numbers are 26% lower than last year, the vast increase in sales reflects the changing buying patterns of customers.
They are spending considerably longer on websites researching the homes they want to buy before visiting developments, and are therefore in a much stronger position to buy a new home when they arrive.