August has bucked the trend with a return of positive price growth across the new homes market, according to SmartNewHomes.
While August is typically a quieter month, with buyers opting to wait for the end of school holidays and summer vacations before commencing the search for a home, this year the market has experienced considerable growth. This recent rise suggests an optimistic forecast for the final quarter of 2006 with strong price rises expected for the remaining months of this year.
David Bexon, managing director at SmartNewHomes.com, commented: “Seasonal patterns typically result in a dip in house prices during summer months, as many people put off searching for a new home until the autumn. The growth in house prices recorded last month, along with the Bank of England’s recent announcement that they will be holding interest rates, has provided a much needed boost for the market and reinforces consumer confidence. The market is now moving in the right direction with further price increases expected over the next few months.”
All property types across the mix experienced price growth in August with town houses proving particularly popular with buyers. However, apartments continue to dominate the mix, now constituting 58 per cent – 2 per cent more than was recorded at the same time last year.
Bexon said: “With the number of apartments on the increase and prices up 2.2 per cent since the same time last year, it cannot be denied that there is still considerable consumer demand for this property type. However, it is essential that government works more closely with developers to address varying property needs across the country – there is still a huge demand for family homes, with recent price increases for detached, semi detached and town houses exceeding those of apartments. The government must be careful not to choose density over and above local demands.”
Scotland leads new home prices in the North
Scotland has been experiencing exceptional growth in 2006, with price rises of almost 10 per cent annually and 4.4 per cent in the last month - the biggest rise recorded in August for any region within the UK. The area remains popular with home buyers and inward migration continues to push up prices in this area.
Many Scottish towns, such as Stirling, are forcing up house price growth, with thriving business centres drawing in young professionals and driving demand.
Bexon commented: “Scotland is proving increasingly popular with new home buyers. Demand is continuing to drive up the price of new homes here, making it the most expensive place to buy a new home outside of London and the South East.”
