Price plateau
The New Homes Index shows that the average price of a new property in June 2004 was £278,140, up 6.1% over the last year and 5.6% over the last three months. However, the average price eased off by 2% over the last month, correcting the seasonal overshoot and suggesting that the new homes market is stabilising.
Resilience in demand
The index also monitors the demand levels for new homes from homebuyers. Last month’s figures show that homebuyers were willing to pay an average £218,962 for a new property: 3.8% higher than the same time last year. This indicates a continued strong demand from consumers for new homes and shows that they are still willing to pay a premium for new homes.
North – South divide
Prices in the north of the country generally rose in June 2004, with particularly strong increases in the North, Yorkshire and Humberside and Scotland. In contrast, prices of new properties in southern England steadied, with the South West decreasing 5% and East Anglia down 2.7% over the last month.
Apartments on top
New homebuyers searching for property on SmartNewHomes.com are most likely to be looking for apartments, making up 42% of searches despite the proportion of apartments on the website being closer to 15% of all the properties featured. This demonstrates the prolonged trend for ‘pied a terre’ city living as well as the continuing popularity of buy-to-let properties – a further indicator that consumers are confident the market will not be crashing.
Migration
Urban dwellers continued to leave the conurbation regions of London, the South East and the West Midlands in their droves as they collectively headed for the rural retreats of the South West, East Midlands, Scotland and Wales. The most significant pattern of migration is from London (-7.4%) to the South West (+2.7). This demonstrates both a search for improved quality of life as well as cheaper properties.
Positive for 2004
David Bexon, Chief Executive of SmartNewHomes, commented: “This month’s index flies in the face of the increasing number of doom reports we have been seeing recently by highlighting the continued high level of consumer demand for new homes. The index shows that rather than a crash, what we are going to see is a natural steadying out of prices as the market comes back to reality following the exceptional rises of recent times.”
