Commenting on the data, David Bexon, Managing Director of SmartNewHomes.com said:
“May saw a return to positive annual growth in the price of a new home for the first time in over two years. This is a significant milestone that will boost confidence among developers and consumers alike.
“The recovery in prices has been driven by high levels of demand from UK homebuyers. The average demand price – the amount a buyer is prepared to pay – has stayed 12-15% ahead of the average stock price for the past four months, illustrating how a desire for home ownership remains a cornerstone of British society. We very much welcome the commitment from the new Housing Minister Grant Shapps that coalition policies will encourage everyone to climb the property ladder.
“However, at the same time as we welcome the return to positive growth, the milestone highlights two significant issues in the current market. The high levels of demand for new homes, and the industry’s attempts to meet that demand, continue to be thwarted by the difficulty in obtaining land for development. The government, through the present system, effectively monopolises access to this primary raw material – an anachronistic situation that must be addressed.
“In addition, while new home price growth now stands at just over 2%, growth in the wider market is running at approximately 10% according to Nationwide. By undervaluing new homes and setting unreasonable lending criteria, mortgage providers are effectively holding homebuyers to ransom."
Have your say on this story using the comment section below