Moderate year on the cards
According to figures released today by SmartNewHomes.com, new home demand prices across the country fell slightly last month, indicating an easing up of 2003’s strong property price rises.
The index tracks the location and price homebuyers are willing to pay for new properties, revealing that the average price a home buyer was willing to pay in February 2004 was £209,312, down 0.7 per cent on the month and 5.6 per cent on three months. Set against the context of sharply rising prices in 2003 (nine per cent) it is clear that prices are still up by 3.8 per cent on the same time last year. Despite this being a small annual increase it still signifies an ongoing healthy market, albeit one growing at a more sensible pace.
London and South East prices level out
London and the South East remain the most expensive areas in the country, with new home buyers willing to pay in excess of £250,000. However, the slowdown is hitting the top end of the market first, as London has become the only region where prices are lower than a year ago.
Popularity of apartments slows
Intense activity in the buy-to-let market over the last six months of 2003 led to apartments rising in popularity to dominate property searches, reaching a high of 47 per cent in December 2003 compared with 39 per cent for detached homes. However, detached houses are now making a comeback and have regained the top position, with 43 per cent of searches taking place for this property type in February compared with 41 per cent for apartments.
This levelling out of the popularity of apartments has been reflected in demand prices, with apartments the only property type to decrease in price over the last year (down by 0.9 per cent) in comparison to detached houses, whose prices rose by 7.8 per cent to an average of £268,455.
Moderate year ahead
David Bexon, chief executive of SmartNewHomes, commented: ‘The price home buyers are willing to pay for a property reflects economic and personal circumstances. Following the huge boom in demand seen last year, recent interest rate rises have prompted home buyers to start searching out keener prices. Nevertheless, prices are still well up on this time last year and the market is still strong. We expect prices will continue to rise, albeit at a more realistic rate.’
smartnewhomes.com