New-build homes see prices fall

Monday, 21, Jul 2008 09:00

Prices for new-build properties have fallen to the lowest level in two years, according to new research from SmartNewHomes.com.

Average prices slipped for the second time in 2008, with a dip of 2.6 per cent between May and June, finds the organisation's new homes index.

As a result, prices are now three per cent lower than in June 2007, with developers charging an average of £260,073 for a property.

The fall was universal in the market, with all forms of property seeing prices slide.

Penthouses led the way, with a drop of 5.9 per cent in prices over the last month, while apartments, which make up over half of the market, saw prices down 2.6 per cent.

Town house prices fell 1.7 per cent to an average of £234,218, while semi-detached and detached homes saw prices down 1.6 and 1.4 per cent respectively, to averages of £232,853 and £312,324.

Price falls were felt most acutely in East Anglia, the south-west and Wales, where average house prices have fallen 10.9, 11.6 and ten per cent respectively.

There was also a sign of a wider slowdown, with the total number of new homes available in June down four per cent on figures for May.

This illustrates a decline in supply, with homebuilders - including Redrow, Persimmon, Barratt Developments and Taylor Wimpey - cutting around 5,000 jobs last month.

"Demand remains high in the new homes market, and while the current range of developer incentives on offer has continued to keep home buyers interested, it is encouraging to see stock prices coming down to a level that more people are willing to pay," commented David Bexon, managing director of SmartNewHomes.

"However, there is still a gap between these two figures.

"While overall property sales are clearly down on this time last year, buyers are still looking to enter the market and developers are helping many people to do this with a range of excellent incentives and schemes, which in some cases have allowed people to bypass financial constraints and secure a more competitive mortgage."

Chris O'Toole