New homes market continues spring soar

The average price of a new home was £236,122 in April 2013, compared to £231,797 in March, rising 1.9% over the month.

Annual growth escalated by 4.1% in April. The average price of a new home is now £9,263 more than the same time last year.

All the major indices have shown a steady rise in average house prices in recent months. New homes cost marginally less than the average asking price in the wider housing market as housebuilders incentivise sales and price realistically.

Prices in the seven out of the 11 regions have recorded positive growth on a monthly, quarterly and annual basis, with Greater London witnessing the biggest monthly price rise in April of 6.8%. Outside the capital, Yorkshire & Humberside recorded the highest monthly price growth of 4.4%. East Anglia suffered its first price drop of the year, falling back to £213,789, its lowest price since April 2012. All regions in the UK except Scotland witnessed positive annual price growth with the South West and North West seeing price rises of 9.0% and 6.6% respectively.

Commenting on the data, Steven Lees, Director of SmartNewHomes, said:

“It has been a very positive spring for developers. The launch of the Help-to-Buy scheme this month has boosted confidence in the new homes market, reflected in positive monthly, quarterly and annual price growth. The premium of living in a new build property in London continues to soar, exacerbated by continued strong interest from wealthy foreign buyers and a lack of supply. According to recent research*, over 60% of the capital’s new homes are being bought by international buyers, often off-plan.

“The scarcity of supply remains the thorn in the side of the housing industry. Despite recent planning reform, we are yet to see any notable impact on supply and the number of homes being built remains as low as ever. The Help to Buy scheme has the potential to have a huge positive effect on our society by helping thousands more buyers into home ownership, but without an increase in supply there is a real risk that the scheme will ultimately only push prices even further out of reach.”

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