UK new home prices rise 1.9% in a month, says survey

Prices of new homes in the UK have risen 1.9% on average and by 6.8% in Greater London in the last month alone, new figures show – and interest from international buyers continues to surge.
The average price of a new home in the UK was £236,122 in April 2013, compared to £231,797 in March, says the latest new homes index from the SmartNewHomes website.

The figures take the average annual increase to 4.1% with prices rising across seven out of the 11 regions of the UK.

Steven Lees, Director of SmartNewHomes, says, “It has been a very positive spring for developers. The launch of the Help to Buy scheme has boosted confidence in the new homes market, reflected in positive monthly, quarterly and annual price growth.

“The scarcity of supply remains the thorn in the side of the housing industry. Despite recent planning reform, we are yet to see any notable impact on supply and the number of homes being built remains as low as ever.

“The Help to Buy scheme has the potential to have a huge positive effect on our society by helping thousands more buyers into home ownership, but without an increase in supply there is a real risk that the scheme will ultimately only push prices even further out of reach.”

The number of international buyers wanting to buy in London helps keep prices high. More than 60% of the capital’s new homes are being bought by international buyers, often off plan, according to a recent survey from the London Central Portfolio Fund.

The largest monthly increase outside London was Yorkshire and Humberside at 4.4% but East Anglia suffered its first price drop of the year, falling back to £213,789, its lowest price since April 2012.

All regions in the UK except Scotland witnessed positive annual price growth, with the South West and North West seeing price rises of 9% and 6.6% respectively.

The index also shows that on a three-month rolling average, the number of new homes added to the market fell further in April.

The number of new homes coming onto the market is likely to increase, following an announcement from NHBC that registrations have risen 22% in the first quarter of 2013. This is fuelled by the government’s £2.2 billion Affordable Homes Programme, set to deliver 170,000 new homes by April 2015.

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