While the UK enjoyed record temperatures in July the new homes market experienced a cooler summer. With the usual July lull taking its toll, new home prices were down 1.6 per cent last month, from £258,581 to £254,374.
The new homes market had been experiencing positive growth in 2006 with prices in the first quarter consistently up on last year. However, regardless of the market’s strength, the summer months always put pressure on prices as the warmer weather, school holidays and summer vacations distract potential buyers from looking for a new home.
While the recent dip may be causing some concern, this fall is not likely to continue, with prices expected to pick up again in the last quarter of the year.
David Bexon, managing director of SmartNewHomes.com, said: “The recent fall in price of a new home was inevitable with the summer months always proving quieter for the industry. The unusually hot weather experienced this July only intensified the situation with even more buyers putting off viewing properties in favour of enjoying the sunshine.
“However, the fall in buying activity offers no call for concern and I am confident that we will see a return of the buoyant market before the autumn.”
New properties in Yorkshire and Humberside in demand
Yorkshire and Humberside remains in the top three most popular places for new home buyers with inward migration of 3 per cent in July. The increased demand for new homes within the region has led to an increase in prices, with new homes in the area up 2.7 per cent on the previous month, reflecting continued demand.
The plight of the apartment and demand for the semi detached
Apartment prices have continued to fall this month, representing the biggest fall in price across the mix, down 2.9 per cent since June. As a result, areas such as the North West, which is currently experiencing high levels of apartment development, has suffered more significant falls in new house prices, with the average price of a new home down 2.2 per cent over the last month.
In contrast, the price of a new semi detached property is up 12.2 per cent since the same time last year – indicating a continued demand for this property type. While the number of semi detached properties in the mix is also up, 2 per cent since July last year, this is clearly not enough to sustain demand.
Bexon commented: “The price of a new apartment has fallen again over the last month – reinforcing our campaign for the young family which highlights an oversupply of apartments and a lack of suitable family homes. However, we are pleased to see a slight fall in the number of apartments making up the new housing mix in July, down 2 per cent over the last month – an indication government may finally be allowing house builders to respond to consumer demand.”
