Average price of new home fell just 0.5% in June

The monthly drop reduced the decline in annual growth in the new homes market to -13.7%. The rising price of larger property types continues to indicate the re-emergence of a supply/demand imbalance in the family homes market, with the price of detached homes increasing for the fourth month running.

David Bexon, Managing Director of SmartNewHomes.com said: "Little can be read into individual monthly house price data, but collectively the signs remain positive that the overall house price decline is continuing to slow.

"Attempts from developers to support buyers in the new homes market have kept prices conservative, but decreasing stock
levels are posing a threat to long-term affordability.

"SmartNewHomes.com is a leading authority on the number of new homes currently being marketed in the UK, and we have long been warning of the impact of slow sales on future supply. More and more industry bodies have now started adding their voices to this, including the National Housing and Planning Advice Unit and RICS.

"Positive buyer behaviour reported by developers in recent weeks does suggest a potential return to normality in the sales market, but any recovery continues to be hampered by the majority of people still frozen out of the mortgage market.

"The new homes market is at risk of another unsustainable price boom as a result of a sudden supply shortfall, if the Government does not take more proactive steps to support housebuilders in kick-starting new schemes, and if improvements in mortgage availability/affordability are not made quickly to support the many people looking to buy at current prices.

"House prices are clearly no longer a discerning factor in keeping buyers out of the market. In June, demand price (the price buyers are willing to pay), increased for the third month running, offering further evidence of growing consumer confidence and the high level of homebuyer activity being recorded across much of the industry."

"Buyers are aware that house prices have reached a low point, and whereas many may have been priced out at the top of the market there is now a widespread perception of improved affordability. The prevailing lack of mortgage finance has prevented many first-time buyers from making their first purchase, but new deals such as the Nationwide 125% mortgage, should help to ignite more competition among lenders."

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