New home prices tumble 3.4 per cent in March

Commenting on the data, David Bexon, Managing Director of said: “The trend we are seeing in the new homes market reflects the erratic price fluctuations currently being recorded across the majority of the UK house price indices. While individual figures showing positive monthly growth do not amount to an upturn, the irregular patterns are indicative of a changing market, and we should take this as a positive sign that the rate of house price decline is at least diminishing.

“The level of mortgage availability continues to dictate the number of speculative buyers able to actually make a purchase, and any talk of ‘green shoots’ can only go hand-in-hand with improvements in this area.

“However, evidence is now emerging to suggest that the tide is slowly starting to turn in this department. Earlier in April, HSBC announced it was allocating £1billion to a new range of mortgages with loan-to-values (LTV) up to 90%, and the latest figures from the Council of Mortgage Lenders (CML) showed an increase in the total number of UK house purchase loans.

Buyers sense that the bottom of the market is close

“The high level of homebuyer interest seen at the start of 2009 has continued into the spring market, and in April the Royal Institution of Chartered Surveyors (RICS) backed-up reports from developers, recording a fifth consecutive monthly rise in buyer enquiries.

“While reports of improved mortgage availability remain tentative, buyers are starting to sense the bottom of the market, and everyone from first-time buyers to seasoned investors are now looking to try and capitalise on competitive prices and historically low interest rates. This resulted in demand price (the price buyers are willing to pay) stabilising in March, following consecutive monthly falls.

Volatile house price figures recorded across the board

“Price adjustments are now widely occurring across the market, as the level of demand for homes starts to once again encroach on the level of supply.

“The situation has reversed for many estate agents in the re-sale market, having gone from too many to too few instructions in a short space of time. This, along with a marginal increase in mortgage approvals has led to price increases being recorded.

“The outlook for developers has also shifted. The severe lack of new home starts over the past year means that the increasingly apparent pent-up demand is close to becoming out of sync with the level of housing stock available. This is reflected in the differing price trends recorded across the property mix.

Significant increase in new homes added to market

“The more positive market sentiment seen in recent weeks, along with continued interest from homebuyers, has resulted in an increase in the total number of new homes developers are putting up for sale. In March, the number of new homes added to increased by 55% from February.

“The erratic UK house price data was reflected across the country in March as all regions recorded monthly price falls, following some instances of strong positive growth in February.”