This is the second consecutive month of positive price growth after consistent decreases since November last year.
David Bexon, Chief Executive of SmartNewHomes.com, comments: “In a week of mixed fortunes for the construction industry – with Wimpey and Mowlem issuing profit warnings whilst others celebrate the potential of London’s successful Olympic bid – we are also seeing both good and bad news in relation to house prices.
“Whilst we are now seeing the first official confirmations of a return to positive house price growth, we can not confidently give the housing market a full bill of clean health just yet. Interest rates are still a major influence on buyer and seller activity, and with the Bank of England refusing to bow to economic pressure and reduce interest rates this month, the revival could be short-lived.
“However further declines in both customer spending and manufacturing output make a move to a 4.5% base rate likely in August. Such a move will be welcomed by the housing market and is likely to act as a catalyst increasing activity and prices across the board.”
Annually, average prices are still down 4.0% on the same time last year. However this is a less significant price decrease than those seen in recent months when prices have been on average 7% lower than the previous year. These figures would appear to indicate that the housing market is back on track, with an early summer boom replacing the usual spring rush which was stalled by the general election.
As well as asking prices of new homes increasing by almost 2% from May to June, buyers indicate that they are willing to pay on average 3.4% more for their new home than last year, providing further evidence that the housing market is recovering from the dip it has been suffering over the first half of this year.
The South West, East Anglia and Wales experienced the biggest price increases over the last few months whilst Yorkshire and Humberside, the North West and the North saw the biggest falls. Average new home prices in London are over 5% higher than at the same time last year, despite seeing prices fall over the last four months.