New home prices down 2.4% in October

SmartNewHomes.com has released its latest monthly report that shows new home prices dipped last month.

The average price of a new home in the UK in October was 255,327, down 2.4% since the same time last year and a further marginal decrease of 0.2% from September.

The report suggests that the housing market hasnt fully recovered from the downturn in prices and activity which has blighted it since the end of last year.

Although SmartNewHomes.com believes the worst of the downturn looks to be over with annual inflation now at 2.4% compared to 8% at its lowest point in spring 2005, continuing negative quarterly inflation would indicate that a return to the strong positive growth rates of the last few years is some way off.

Average new home prices in London, the South-West, West Midlands and the North suffered the worst of the wider market slowdown, while East Anglia and Wales saw prices rise.

Measures of migration between regions in the UK show a seasonal slowdown in moves to both the South-West and Scotland although both remained popular regions, and migration to the West and East Midlands decreased.

The readjustment in prices was mirrored across all property types with the exception of apartments which, as well as seeing prices rise 1.7% over the last month, continue to dominate the market making up over half of all new homes. Townhouses saw the largest price drop of 6.6% over the last quarter.

David Bexon, managing director of SmartNewHomes.com, says: “It has been a difficult year for the UK housing market, reflected in new home price inflation and activity. Although the market is certainly out of the woods and the likelihood of a crash recedes significantly every month, it is still in a delicate state with buyers acting cautiously, slowing down activity across the board.

“The situation is unlikely to change much as we approach the festive season but once the new year is upon us, it is quite likely that buyers and sellers will have been reassured by the markets stability and we could see prices begin to edge once again.”