New home prices in the UK could soon be experiencing positive annual price inflation according to figures released today by SmartNewHomes.com, the UK’s leading new homes website.
In their monthly report analysing over 85% of the new homes stock available in the UK over the last month, SmartNewHomes.com reveals that prices rose on average by 0.4% in August 2005 but are still 5.6% lower than at the same time last year.
However, three monthly changes, more indicative of longer-term movements in the market, show a propensity towards positive growth.
Prices over this period have been continuously rising by increasing increments for the past seven months and now post a 2.1% increase, the highest so far this year.
Around the UK, the South East, South West and Wales saw the largest price increases over the past few months, with the West Midlands, Yorkshire and Humberside and the North and North West experiencing the worst of the more wide-spread price decreases.
Prices in London fell month-on-month for the seventh consecutive month but remain 2.4% higher than at the same time last year and more expensive than in any other region of the country.
Further data from SmartNewHomes.com shows that consumer confidence is improving over the year as it becomes more evident that a house price crash in the foreseeable future is highly unlikely.
The average demand price, the price homebuyers are willing to pay for a new home, has increased over the last month (+1.3%) and year (+1.1), indicating that consumers have more confidence in the state of the new homes market and giving a further positive boost to the future of the market.
In addition, SmartNewHomes.com reports a 13% increase in the monthly total of urgent leads generated through its website from July 2005 to August 2005, and a 7.7% increase in the number of searches being carried out on the website since the beginning of this year, reflecting the growing number of homebuyers in the market.
David Bexon, managing director of SmartNewHomes.com, says: “As we come out of the summer months we inevitably see a fresh burst of activity in the housing market.
“This has been boosted this month by the long-awaited decrease in interest rates, encouraging those buyers who were sitting on the sidelines to return to the market.
“However prices are still over five per cent lower than at
the same time last year and, although the three monthly changes would appear to indicate that positive inflation is just around the corner, it may take some time for this to filter through to all the regions of the UK.”