Seasonal slowdown improves affordability of new homes
The recent decreases can be largely attributed to a seasonal slowdown that sees the wider market become slightly subdued in the weeks immediately following the new year. However, compared to the price dips seen last January, when prices fell by 4.3% from the previous year, the change this year has been mild.
SmartNewHomes.com also measures the price homebuyers indicate they are willing to pay for a new home on the website. This demonstrates that although prices have decreased slightly, homebuyers are consistently willing to pay higher prices for new homes, indicating that the market will see positive growth in the next months.
London prices on the up
The six month trend of rising new home prices in London continued, with the capital having recorded nine months of decreases previously. Regionally, the West Midlands has seen the strongest growth, up 7.2% on the same time last year. Wales and the North West have been tipped as the next hotspots, expected to experience strong price increases this year and both starting 2005 with monthly rises of 0.5% and 0.7% respectively.
Apartments on high
The proportion of apartments for sale in the UK continues to increase dramatically as the trend for city-style living is maintained, fuelled by regeneration development projects in many areas including Manchester and Liverpool. Apartment homes now make up 54.3% of all homes, compared to just 31.2% for detached homes.
David Bexon, Chief Executive of SmartNewHomes.com, comments: “This month’s index shows that 2005 starts the year with new homes priced more competitively than at the start of 2004, but with homebuyers still willing to pay more for new homes, there is much scope in the market for strong activity. We are expecting this to translate into a positive 2005 with prices increasing, albeit at steadier levels. Concerns that the market may be in decline are unfounded and couldn’t be further from reality.”