London prices pushing buyers out of the capital

SmartNewHomes, new homes index & migration monitor shows new home prices in London have continued to rise, which could be pushing buyers at the lower end of the market out of the capital.

More new home buyers are looking to purchase in commuter hotspots in the South such as Hampshire and Essex, where prices are more affordable.

After the Easter lull experienced in the market last month, confidence appears to have returned as house prices are up 1.4%.

This month has seen increased buyer interest, in apartments and penthouses, which has resulted in average price increases of 2.6% and 4.2% respectively.

Large City bonuses have undoubtedly boosted this late spring demand.

This buying group of predominantly young, single professionals, are looking to purchase new, conveniently located and high quality homes to suit their hectic city lifestyles.

We are continuing to see an overall increase in the average house price compared with last year, indicating a strong housing market for 2006 as we enter the summer season.

After a small blip experienced last month, demand is still strong, pushing up prices in the most popular regions .

SmartNewHomes.com also records how much homebuyers indicate they are willing to pay for a new home.

The average price buyers are willing to pay (demand price) and the average price of a new home on the market (stock price) remain very close, despite the fact that demand price has fallen slightly over the last month, by 0.2%.

However, the average price buyers are willing to pay for a new home remains up 3.2% since the same time last year, while the average stock price is up just 1.3% over the same period indicating that buyers continue to view the market with confidence.

London continues to lead the annual price increases, with average new home prices showing strong growth of 9.8% since the same time last year.

The South West and Wales are experiencing the biggest drop in new home prices over the last year, with prices down 12% and 8.4% respectively.

Southern England generally has experienced an increase in house prices over the last month while the Midlands and some northern regions, excluding Scotland, suffered a decline over the same period.