New home prices in the UK increase for the sixth month in a row

Average asking price for a new home continues to increase

The average asking price for a new home in the UK has increased 0.2% since the start of 2012, the sixth consecutive monthly increase, according to the latest index from SmartNewHomes published today (Monday 02 April).

The average asking price is now £229,938, the highest level since October 2008 and £10,226 more than the same time last year, a rise of 4.7%.

The new homes market continues to indicate steady long term price growth in contrast with more dramatic price fluctuations in the wider market, where the average home is now £3,854 more expensive than a new home.

Ten of the 11 regions covered by the index recorded positive annual price growth in February, with only the South West recording an annual price fall of 3.9%.

On an annual basis prices of new homes in Greater London have increased by 11% to an average of £217,839 and the South East has seen the same price rise taking the average price to £350,088 while in the West Midlands the annual price growth is 17% to an average of £205,107.

In East Anglia prices are up 7.3% year on year, up 6.7% in Yorkshire and Humber, up 4.7% in the North West, up 4.5% in the North East, up 3.1% in Scotland and up 2.9% in Wales.

The underlying strength of the market in the South East is evident this month, with the South East, Greater London and East Anglia showing monthly price rises of 3.3%, 0.5% and 2.9% respectively.

The number of new homes coming onto the market increased for the third consecutive month in February, the figures also show. The UK’s new National Planning Policy Framework (NPPF) which came into effect in March has been designed to simplify the planning system, and means more new homes are expected to come on stream for buyers.

‘The average asking price for a new home continued on its upward path in February, reaching its highest level since October 2008. However, asking prices for new homes are less than in the wider market with house builders continuing to offer a wide range of deals and incentives to deliver the best possible value to buyers,’ said Steven Lees, director of SmartNewHomes.

‘With mortgage finance now improving, the shortage of property is the biggest threat to home ownership in the UK, but the introduction of the NPPF promises a step change in how planning is granted for new developments, meaning many more new homes are expected to be built in areas where they are most needed,’ he added.

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