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Strong price growth for new homes in spite of recession

The new homes market continues to show long term price stability. New homes are on average £5,635 lower than in the wider market.

Eight of the 11 regions recorded positive monthly growth in March. The South East and Greater London also recorded strong growth over three months and on an annual basis with the former seeing 3.1% and 4.4% rises respectively and
Greater London 4.6% and 8.1% respectively. Beyond this corner of the UK, price growth is less consistent with average
prices down 8.3% over 12 months in the North East and up 0.4% in the same period in Yorkshire and Humberside.

The number of new homes coming onto the market continues to climb, bringing greater choice to new home buyers. Annual growth in new homes added stood at 73.5% in March.

However, the volumes are still woefully short of the number of new homes required to meet demand, with London Mayor Boris Johnson acknowledging the need to build tens of thousands more in the capital.

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

"Housebuilders have reported a strong start to the year with unwavering demand from buyers and this is reflected in the
strength of new homes prices. The launch of NewBuy and the NPPF in the first quarter of the year have contributed to
positive market sentiment and the announcement from HSBC that that they are increasing their maximum loan to value
on new build properties is further evidence of this faith in new homes. We are hopeful that many more lenders will follow
suit in the coming weeks.

“Reports of a double dip recession from the Office of National Statistics (ONS) could take some of the wind out of the
property market’s sails. However, developers continue to offer an array of innovative deals and incentives to keep new
homes affordable for buyers and we expect demand to continue to underpin prices this year as the shortage continues.”

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