Decreasing availability of stock and intense buyer interest at the start of the year are currently working to distort figures, leading to monthly fluctuations, according to the company. It believes that while there are some signs of softening price falls for new homes, it is too soon to call the bottom of the market with further, albeit marginal price falls still expected over the coming months.
SmartNewHomes.com’s data shows that the average new home price has gone up to £227,893, up by 2.8% over the month and up 0.6% over the quarter. However, it is still 9.6% down over the year.
Commenting on the data, David Bexon, managing director of SmartNewHomes.com said: “Many of the UK house price indices are now recording erratic fluctuations in their monthly data. One month’s worth of positive growth does not indicate an emergence from the downward price trend, however, renewed interest from homebuyers and investors at the start of 2009 has put the brakes on price reductions from many developers, and resulted in more positive pricing for new homes coming onto the market.
“While it is certainly too early to call a turnaround in the current price correction, the tide is now starting to turn. The norm of demand exceeding supply, seen in the years before the credit crunch, is close to being re-established, and heightened buyer activity at the start of the year has translated into just enough sales for developers to catch a glimpse of the imminent shortfall we are facing in the new homes market. With reports of new home starts falling dramatically over the past year, we are set for a dangerous shortfall of homes when buyer activity returns to normal levels.
“While there are some early signs of softening price falls, the trend for the overall market is expected to continue downwards in the short term. Reports of improved mortgage availability are emerging but these are still tentative, and it will be some time before we see this leading to any form of significant stability.”
