New homes market proves resilient despite uncertainty

This is according to the latest data from the SmartNewHomes monthly New Homes Index.

Steve Lees, Director said:

"The increase in the average price of a new home in February will come as a surprise to the hawks that have been warning of a weakening in consumer sentiment and justifies the guarded optimism of many in the industry. Public policy has caused the rate of development to lag behind consumer demand for many years now, so while the economic outlook remains uncertain, there remains a significant level of pent-up demand in the market, which should help to support sales.

“Having said that, the nature of the property market is such that consumer demand is always mediated by the mortgage industry, and developers remain wary that current highly restrictive lending practices may continue to hold back the market. The reaction of the mortgage market to a possible rise in interest rates, which is looking increasingly likely at some point in the coming months, will act as an important barometer for the medium-term outlook of the new homes market.”

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