The average price of a new home in the UK last month was £256,648 up 0.2% on April’s price whilst still down 7.0% since the price peaks of last spring and early summer. The first positive monthly price change this year suggests the market is starting to recover from its nine-month downturn.
David Bexon, Chief Executive of SmartNewHomes.com, comments: “These figures show that the housing market is on the cusp of a recovery, but the situation is still fragile. Any number of factors could turn the market down again. The general election seemed to have stalled the usual spring recovery and the reluctance of the Bank of England Monetary Policy Committee to reduce interest rates has not helped restore buyer confidence in the market place.
“There is a great deal of uncertainty as to where prices are heading for the remainder of this year with both buyers and sellers wary about making any hasty decisions.”
Another factor that suggests the market turning for the better is the high price potential that new home buyers are willing to pay. Last month this rose on average by 3.3% suggesting that actual prices have the potential to rise further.
Regionally, prices are already starting to increase in many of the areas which tend to set the course for UK house prices, i.e. the South West, South East and West Midlands, all of which experienced price increases over the last several months. In contrast, the North West, North and East Midlands have seen average new home prices decrease.
Apartments continue to dominate the choice of new home currently available to buy in the UK, making up over half of new properties (57.7%) compared to less than one third (29.5%) of detached homes.
