The new homes market is set for a positive end to 2006 with the average price of a new home up on the previous month. Despite a dip in prices over the summer months the average price of a new home is expected to finish above that recorded at the same time last year.
While November proved a strong month for most property types, it was semi detached homes and townhouses that experienced the biggest price growth of 4.3 per cent and 2.4 per cent respectively - reinforcing the continued demand for family homes across the UK.
The price buyers are willing to pay for a new home (demand) has continued to rise steadily since the early months of 2006, unlike the average price of a new home (stock) which has fluctuated over recent months, indicating that buyers have remained confident in the new homes market, despite the summer slow down and the interest rate rises announced earlier in the year.
New homes price index
November has seen the biggest annual price growth in new homes since April, with the average price of a new home up 1.9 per cent on the price recorded at the same time last year. This year’s annual price increase has bucked the trend experienced over the last two years, which has seen the average price of a new home fall towards the end of the year, an indication that the new homes market is set for a positive start to 2007.
The price of a new home has risen 1.4 per cent over the last month, reinforcing the return of a positive trend for the new homes market at a traditionally quieter time of year. This month’s decision by the Bank of England to hold interest rates should ensure a positive start to 2007.
The average price of a new home has risen, up 1.9 per cent on the price experienced at the same time last year. While the second and third quarters of 2006 saw the price of a new home fall, momentum across the new homes market has now returned with the final quarter set to experience the biggest price growth of 2006.
The new homes market got off to a slow start in 2006, with January’s prices down on the previous year. However, the end of quarter one saw prices rise drastically and while the new homes market experienced a considerable slow down during the summer months the positive price growth experienced over the last two months suggests a strong start to 2007.
London and South East prove most expensive but Scotland is catching up
London and the South East remained the two most expensive regions for buying a new home in 2006, despite the continued migration away from these two areas. However, while the south east has experienced a fall in new home prices over the last year London experienced one of the biggest price growths, only second to Scotland which is now catching up and boasts the biggest price growth (16.6 per cent) over the last twelve months.
Migration
SmartNewHomes produces its migration monitor by calculating the number of users of the website based in a region less the number of searches made for homes in that area.
The SmartNewHomes.com migration monitor compares the number of homebuyers living in any one region to the number of homebuyers looking for properties in that area.
Northern England and Scotland are proving increasingly popular with new home buyers as more look to migrate into these areas. Scotland along with Yorkshire and Humberside proved the most popular destinations in November, closely followed by the north and Wales.
The more affordable prices generally experienced in the north, combined with the increased number of detached and semi detached homes available here are proving motivating factors for many new home buyers. This combined with improved rail and road links has seen many growing towns and cities situated close to established commercial centres, such as Huddersfield and Swansea thrive over the last year.
The number of new apartments has continued to grow over the last year, at the expense of detached homes. However, semi detached homes, and in particular townhouses now represent an increased proportion of the new homes mix.
Semi detached homes have experienced the biggest price growth across the mix, up 13.5 per cent since November 2005, with average prices catching up with the townhouse.
With government initiatives to build more family homes now in place, 2007 should see an increase in the number of semi detached homes as well as townhouses entering the mix.
