This dip, of .3 per cent from June to July 2005 follows two consecutive months of positive price growth after consistent decreases since November last year [see graphs 1 & 2 below]. Annually, prices in July 2005 were down 4.3% from July 2004; the fifth month of negative annual price inflation this year.
David Bexon, managing director of SmartNewHomes.com, commented: “We expect to see a slight decrease in prices and stagnation in activity at this time of the year as both buyers and sellers take a break from the market over the summer months. In addition, the anticipation of the base rate reduction effectively paused activity as many people waited to see which way the Bank of England would move.
“We are now likely to see the market liven up coming out of the summer lull over the next month or so as activity increases. If the wider economic conditions permit a further reduction in the base rate, then it would not be surprising to see house prices returning to comfortable levels of positive inflation by the end of the year.”
The north-south divide continues to present itself as all of the regions in the north experience price falls over the last year, whilst the southern regions see prices climb. Wales and Scotland have both seen prices remain more or less stable over the last year.
In addition the number of apartments for sale as a proportion of all new homes continues to rise to 56% compared to less than 30% of detached homes. This demonstrates housebuilders’ response to Government’s housing density targets and the high number of city centre and regeneration projects which typically comprise of mostly smaller units. However demand figures show that homebuyers are also shifting their buying habits and are increasingly looking for apartments (49%) more than detached homes (35%).
