Flat surplus sees new home prices fall
A surplus of flats has caused the average price of a new home to fall
Thursday, 08, Dec 2005 11:03
The growing trend among homebuilders towards constructing flats has contributed to a fall in the average price of new homes, figures show.
The average price of a new home in November was £255,751, down 4.8 per cent on the same time last year, according to SmartNewHomes.com.
Although in theory a fall in the average price of a new home is good news for homebuyers, SmartNewHomes.com says it has been brought about by government restraints forcing homebuilders to construct smaller units such as flats, despite homebuyers preferring houses.
This has created a surplus of cheaper apartments, which are dragging down the average prices of new homes.
Over half of new homes currently available in the UK are apartments, while less than a third are detached homes.
This is a reverse from the situation three years ago when apartments formed 33 per cent of new home stock, and detached homes accounted for 48 per cent.
"These figures make it clear that there is currently a surplus of apartments on the market and this is having a negative effect on average prices," said David Bexon, managing director of SmartNewHomes.com.
He added: "Homebuyers still prefer detached and semi-detached properties for family and starter homes but there is distinct shortage of these on the market."
Semi-detached homes remained the cheapest new properties on the market in November with an average price of £212,486, compared to penthouses at the opposite end of the market with an average value of £384,870.
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