New-build homes price inflation has risen by 9% in the last 12 months, research from Bradford & Bingley Land & New Homes says.
The cost of an average new home in the UK now stands at £186,747, compared to £172,715 in 2002.
The figures from L&NH reveal that the north of England is leading the way with a major 31% hike in prices over the last 12 months. The South-East in comparison has seen a fall of 2%.
The five-year picture also shows massive price gains throughout the country. Nationally the cost of a new home has risen by 69%. The South-West and the North witnessing the largest rises of 99% and 91% respectively.
Tom Harris, national director of Bradford & Bingley L&NH believes that a series of connected issues are causing increased price inflation in the new homes market and are likely to fuel even bigger rises over the short to mid term. He points to the lengthy planning permission process, coupled with local authorities' interpretation of government planning policies, in particular the PPG3 directives and the provision of affordable housing as the leading culprits as well as overall increased homebuyer confidence.
Harris says: “All three factors combined are leading to bottlenecks in the construction process and house price inflation rises. Under new government planning laws, developers are being strangled with extra tiers of unnecessary bureaucracy, time delays an added costs. Instead, lifting the restrictions on developers an allowing them to build the type and number of dwellings buyers are looking for is the answer. These somewhat draconian laws should be relaxed in order to make the market more fluid which in time will stabilise prices.”