The average asking price of a new home in November was £224,298 increasing 0.8% since October. This is the second consecutive monthly increase with prices now up 1.3% over three months.
Annual growth has fallen back from a peak of 5.0% in October to a more sustainable 1.7%. The average price of a new home is now £3,644 more than the same time last year.
The new homes market continues to show increasing stability. In the wider market, however, average asking prices declined in November, as sellers valued their property more realistically, bringing them more closely in line with prices in the new homes market.
Eight of the 11 regions saw prices rise in November with Wales recording monthly growth of 7.4%. Prices there were also up 8.2% over three months and 1.5% on an annual basis. Barratt Homes is helping to keep homes affordable for buyers in the region through its Head Start scheme which works by providing first time buyers with a loan of 15% of the purchase price of a property. Buyers then require a deposit of just 5%. Using Head Start at Barratt Homes’ Abbottsmoor development near Port Talbot, first time buyers can purchase a two bedroom house priced at £124,995 with a deposit of only £6,249. The West Midlands extended its recent price gains with the average asking price up 0.6% over the month and annual growth now 15.4%. In East Anglia, however, prices fell 2.8% in November, 2.1% over the quarter and 6.3% over 12 months.
Date Published: 23 December 2011
Conditions in 2012 will be challenging, but the streamlined new homes market is robust and well positioned to weather the wider economic storm, supported by a strong underlying demand for new homes, predicts SmartNewHomes.
New home starts are expected to remain low, in the region of 120,000 units over the course of the year, with an increase in planning approvals anticipated in the latter half of the year when the NPPF (National Planning Policy Framework) comes into effect. Until then, the current stagnation in the planning system due to uncertainty amongst developers, planners and local authorities, will continue to hinder development projects across the board.
Average new home prices will experience nominal growth, in the region of +2-3% over the course of the year. SmartNewHomes anticipates that first time buyers will make a noticeable return to the market next year, supported by government schemes such as FirstBuy and the recently announced mortgage indemnity scheme, which enables them to buy a home outright with a 5% deposit. It is possible that those first time buyers who were about to buy when the recession began and mortgage products were withdrawn, have in many cases been saving for the last four years and now have a sizeable deposit which will put them in a good position to buy next year.
Date Published: 06 December 2011
The average price of a new home was £222,620 in October, increasing by +0.6% since September. Prices were also up +0.8% over the last three months.
Prices have increased by 5% annually, with a new home now costing £10,517 more than at the same time last year. This represents a reversal in the slowing of annual growth seen consistently since June 2011.
The new homes market is showing increasing price stability. New homes cost less than the average asking price in the wider housing market as housebuilders continue to incentivise sales and price realistically.
Of the 11 regions, nine recorded positive annual growth in October with the West Midlands seeing a significant monthly rise of 3.6% and an annual price increase of 19.9%. Crest Nicholson are keeping homes affordable for buyers in this region by offering a new deposit scheme at its Park Central development in Birmingham city centre. Buyers only need to pay a 5% deposit with Crest Nicholson matching this amount for free and with nothing to pay back.
However, in the South West and Greater London, prices fell by -1.9% and -3.4% respectively in October, as developers continue to offer better value to price sensitive buyers. Wales is the most affordable region with the average price of a new home currently costing £178,075.
Date Published: 01 December 2011
Steve Lees, Director at SmartNewHomes comments on ‘A Housing Strategy for England’:
“The Government’s new build mortgage indemnity scheme provides a welcome lifeline for perfectly credit-worthy first time buyers who are struggling to raise the large deposits necessary to buy their first property.
"Improvements to affordability will drive demand, so I am pleased that the mortgage scheme is announced alongside a new £400million fund to get stalled developments moving, which will help ensure these funds make a real difference to the wider economy. Over the long term hundreds of thousands more new homes need to be developed every year and it remains to be seen what impact the new Localism Act will have on development levels once it finds its feet among communities.”
Date Published: 21 November 2011
Almost a quarter of new homes (23%) are now available to buy using a shared equity scheme, according to leading new homes website SmartNewHomes. As first time buyers struggle to raise the large deposits now needed to buy their first home, housebuilders have responded by increasingly focusing on offering shared equity options to make home ownership more affordable.
The current housing market conditions have created unprecedented challenges for large sections of society who wish to own their own homes. Strict deposit requirements of around 20% have made it virtually impossible for first time buyers on average incomes to save enough money to get on the property ladder without parental help.
Shared equity offers another solution to affordability problems and there is now significant support from a wide choice of lenders, making it a straightforward process for potential first time buyers whose household earns £60,000 a year or less. Housebuilders run numerous private shared equity schemes of their own, inviting first time buyers to borrow an equity loan alongside their own small deposit, raising a mortgage for the remaining amount. Many developers have also been awarded FirstBuy funding from the Government, which enables their buyers to access a 20% loan provided jointly by the Government and the housebuilder, putting in their own 5% deposit and raising a 75% loan to value mortgage.
Date Published: 16 November 2011
One in ten first time buyers are so desperate to raise a deposit that they are prepared to use a credit card or bank loan to cover the cost, according to a new survey of first time buyers by SmartNewHomes. To address some of the issues raised in the survey, the UK’s leading new homes site launched its new First Time Buyers’ Club this week designed to give information on the options available and the steps involved in the journey to owning a new home.
Funding a deposit remains the biggest financial hurdle to home ownership for survey respondents. Half expect to use their savings, while nearly one fifth (18%) intend to turn to the ‘bank of mum and dad’ and 5% will be forced to sell a personal asset such as a car. But the fact that 10% are intending to borrow money on credit cards and bank loans is a cause for concern.
The well-documented reluctance of lenders to give loans to first time buyers has resulted in 41% also being concerned about obtaining a mortgage. Despite a new government initiative, FirstBuy, being announced in May, most (63%) still believe the government should do more to help them buy their first home. Sadly, 16% of those polled don’t ever expect to own their own home while a fifth believe they will be in their 40s.
Date Published: 06 November 2011
The average price of a new home fell by -0.1% in September to £221,276. In the third quarter of 2011 prices were down -1.8% and decreased -0.6% annually.
Prices in September were £1,285 less than the same time last year but have climbed £5,490 since the start of this year. First time buyer affordability is improving with nearly a quarter (23%) of all new homes for sale in September available with shared equity, which has increased since August.
The new homes market, as with the wider market, was relatively stable in the third quarter against a backdrop of increasing economic uncertainty. New homes are now £11,721 less than the average asking price on Rightmove as housebuilders continue to incentivise sales and price realistically.
The strongest monthly house price growth was seen in Scotland where the average price of a new home was up 6.2% on August, contributing to the region’s strong growth in the third quarter of 7.3%. The West Midlands saw prices fall back in September and over three months but annual growth still stood at 13.2%. The East Midlands saw prices stagnate in the third quarter, decreasing -6.7% over this period and -5.2% on a monthly basis. Price rises in greater London in September mean annual growth is now -15.5% as developers build to changing buyer demand and budget.
Date Published: 27 October 2011
The Planning Officers Society contributes to the current scaremongering surrounding changes to the planning system by claiming that house prices will be driven down by the Government's reforms, in yesterday's front page article.
Housebuilders build homes in areas where people are willing and able to buy them; largely places which are prosperous, with strong employment opportunities and demand from buyers with deposits and stable incomes. Our research shows that areas with higher rates of new development consistently record higher house price growth. Investment by a developer attracts new residents with spending power, which in turn attract other businesses and investment in services to cater for their needs, bringing a boost to the entire area.
Using data from the Department for Communities and Local Government, we compared housebuilding levels with average house price growth across all nine English regions. In all cases there was a strong positive correlation between the number of new homes built in a region and the rate of house price growth. On average over the last year, each region saw house price growth of 0.63% for every 1,000 new homes completed in that area.
The facts tell us that housebuilding makes a significant and lasting contribution to building prosperous local economies.
Date Published: 29 September 2011
Steve Lees, Director at SmartNewHomes, comments on RIBA’s Case for Space Study:
"Housebuilders work closely with communities to ensure they build new homes that meet local demand and at prices local people can afford. Developers are charged with making the most of the land allowed for development and frequently make excellent use of loft space building over three storeys where larger plots of land are not available.
“Planning restrictions have a large part to play in what housebuilders are able to build and where and with the National Planning Policy Framework (NPPF) having now entered a period of consultation the industry welcomes feedback from the public on how it can continue to build attractive and comfortable homes that people want to live in.”
Date Published: 15 September 2011
The average price of a new home fell by 2% in July, extending the first price fall of 2011 in June. Positive growth, however, was recorded on a three-month and annual basis, up 0.5% and 1.4% respectively.
The average price of a new home is now £3,128 more than in July 2010, evidence of the resilience of the new homes market. Annual growth has fallen back to a more sustainable level, following growth of 3.4% in May and June. This is also indicative of the traditional lull in demand for property from buyers during the summer months and housebuilders incentivising sales.
Analysis of the major house price indices reveals that as with the New Homes Index, RightMove saw a drop in asking prices in July, suggesting that homeowners are also taking a more realistic approach in a quieter market. The latest figures also reveal that new home prices remain consistently lower than the re-sale market.
Of all the regions, Yorkshire and Humberside recorded the strongest monthly growth in July, with prices up 4.5% on June’s figures. Consecutive growth over four months has helped consolidate the region’s recovery and annual growth now stands at 4.2%. In contrast, a price fall in Greater London in July reversed gains seen in June and means annual growth now stands at -21%.
Date Published: 23 August 2011
Steve Lees, Director at SmartNewHomes, comments on the NHBC’s new build registration figures:
“The latest NHBC data paints a more positive picture of the new homes market. An 11% increase in new home registrations in Q2, compared to the same period last year, is certainly encouraging. As we approach the quieter summer period we are optimistic that the wide range of developer deals and incentives, as well as the government’s newly launched FirstBuy scheme, will help sustain industry activity.
"However, there is still a vast gap between the number of new homes being built and the number needed to make up the massive shortfall between supply and demand in the UK, and until mortgage finance and the supply of land for development improves, the situation is unlikely to improve drastically."
Date Published: 29 July 2011
The average price of a new home fell by 1.2% (£2,724) in June to £225,317, the first fall in values since January this year. Positive growth was recorded on a three-month and annual basis, up 3.2% and 3.4% respectively.
Despite a monthly dip in values, prices remain 3.4% higher than in June 2010, suggesting that the new homes market is recovering year on year and remains resilient in the face of continued economic uncertainty.
Values in the wider property market are fluctuating, with Rightmove and Nationwide showing rises in June, while Land Registry recorded a drop in prices in May. Asking prices for new homes remain consistently below Rightmove's asking prices in the wider market, as developers continue to value homes more realistically than other sellers.
The strongest price growth in July was seen in the North, Yorkshire & Humber and the East Midlands, which saw price rises of 4.6%, 6.2% and 4.3% respectively. The Welsh housing market is still struggling, with new home prices falling 2.7% in June and -3% annually. The Greater London market is showing signs of recovery with a further monthly rise in June, which is helping reduce the annual price fall.
Date Published: 25 July 2011
The average price of a new home rose by 3.8% in May to £228,041, the highest level since October 2008. Strong positive growth was also recorded on a three month and annual basis, up 4% and 3.4% respectively.
Annual price growth was +3.4% in May, the highest increase for eight months. The traditional ‘spring bounce’ in buying activity, recent good weather and continued low base rate have all contributed to higher demand for new homes.
All major indices have shown a rise in average house prices in recent months. The general trend shows asking prices rising strongly and it is likely that this positive growth will be translated into further increases in the Land Registry and Nationwide Indices over the coming months.
The East and West Midlands saw the strongest price growth in May. Growth in the East Midlands has been driven by
the region’s major city, Nottingham, which recorded price rises of 7.8%. Overall the regional markets remain volatile,
and we expect this to remain the case for the foreseeable future as the current low rate of housebuilding ensures that
changes are calculated from a low base.
Date Published: 20 June 2011
The new homes market rose by 0.7% in April, meaning that the average new home now costs £219,766. This price is down by 0.2% on an annual basis, continuing the medium term trend of minimal change in the market.
Annual growth stood at -0.2% in April. Price growth has remained in a very narrow band between +/- 2% for seven consecutive months now, demonstrating the stability and resilience of the new homes market through testing economic circumstances.
While the new homes market has remained broadly flat, a comparison of other index measures shows the degree of uncertainty faced by the UK property market. Asking prices on Rightmove have risen significantly in recent months, whereas the Land Registry index shows values slipping. This indicates homeowners are being too optimistic in their asking prices, whereas more realistic developers have consistently priced below the open market average.
The regional markets remain volatile, and we expect this to remain the case for the foreseeable future as the current low rate of housebuilding ensures that changes are calculated from a low base. London, East Anglia the South West and South East have been notable performers according to the latest results, with all three regions registering positive growth over the last three months.
Date Published: 23 May 2011
Areas with higher rates of new development consistently record higher house price growth, according to new research from smartnewhomes, showing how housebuilding activity can boost the prosperity of a local community.
Using data from the department for Communities and Local Government, smartnewhomes compared housebuilding levels with average house price growth over the last 1, 3 and 5 years, across all nine English regions. In all cases there was a strong positive correlation between the number of new homes built in a region and the rate of house price growth.
On average over the last year, each region saw house price growth of 0.63% for every 1,000 new homes completed in that area. Over the last three years, the figure was 0.16% and the rate was 0.23% over the last five years.
The research shows that housebuilding activity makes a significant contribution to the prosperity of an area, and that NIMBY fears over the financial impact of new homes are unfounded. Developers look to build wherever there is likely to be demand, and their investment typically attracts other businesses and residents to enter the area in turn, boosting the local economy.
Steve Lees, Director at SmartNewHomes, comments:
"House builders would not apply for permission to build new homes in an area if there was not a demand from homebuyers. By responding to this demand, be it from first-time buyers who provide impetus from the bottom rung of the property ladder or from families who might otherwise move away, housebuilding makes a significant and lasting contribution to building prosperous local economies."
Date Published: 3 May 2011
The average price of a new home slipped by -0.4% in March to £218,344. There are small price fluctuations each month, but over the medium term values have remained consistently within a narrow range between £215,000 and £220,000.
Annual growth in new home prices stood at +1.0% in March. Growth would undoubtedly be higher were it not for the continued intransigence of some mortgage providers. The performance of the sector over the last year demonstrates that the apparent unwillingness of some lenders to offer loans on new homes is not grounded in evidence.
Both the Rightmove and Nationwide indices have risen in the last month. While homebuilders have remained cautious, increased activity levels among buyers, especially over the Easter holiday, could bring a small boost in asking prices next month.
The regional breakdown shows the extent to which the UK property market operates at a micro level. While prices in the South East region have slipped recently, values in Brighton rose by 11.9% last month, which could be a result of increased interest from buyers for homes in the seaside town as the summer approaches. By contrast, prices in East Anglia rose by +1.9% in March, but the city of Cambridge fared less well as values slipped by -2.1% on average to £288,556.
Date Published: 18 April 2011
Steve Lees, Director at SmartNewHomes, comments on the Firstbuy scheme announced in today’s budget:
"Finally, some good news for the housebuilding industry. The sector has been stifled by the lack of funding available to first time buyers who are currently unable to raise the large deposits required by lenders, but the fact that Firstbuy is targeted only at new homes means that the stagnation at the bottom of the market will be eased. This will enable housebuilders to build more, providing a significant boost to the sector and potentially creating thousands of new jobs.
"This is not a long term solution, as the scheme will only help 10,000 buyers, but alongside the many shared equity schemes already offered by developers, we are hopeful it will have a real impact."
Date Published: 23 March 2011
The average price of a new home stood at £219,172 in February, up +1.6% on the previous month.
Values continue to fluctuate on a month-by month basis, but nervous homebuyers should be reassured by the medium-term average, which has stayed steady at approximately £217,500.
Annual growth also rose in February, up by +1.9%. While concerns about mortgage availability and job security remain, the latest figures suggest the new homes market may prove more resilient than some analysts have predicted.
Each of the major indices has recorded a slight price rise in the last month, which will offer some encouragement to the market. However, it remains to be seen whether the significant uplift in the Rightmove index will translate into corresponding gains in the Nationwide and Land Registry data, or if estate agents are simply overvaluing to win instructions while stock levels remain low.
The regional picture supports the overall national view that the new homes market is proving resilient in a difficult economic climate, with many areas seeing positive price swings. It is noticeable however that the few red numbers that do appear are predominantly in the South East, which is traditionally the strongest performing area for the UK property market. With the ongoing restrictions in the mortgage market, first-time buyers in the region have found it especially difficult to obtain finance because of the higher house prices and so larger deposits needed.
Date Published: 28 March 2011
Steve Lees, Director at SmartNewHomes, comments on the details of the New Homes Bonus:
“Despite the government ring-fencing nearly £1billion for local authorities that agree to new developments in their area, on its own, the question remains whether this money will be enough to counter nimbyism in areas where new homes are needed most. Incentivising local people to agree to new homes in return for sustaining local services that are under already threat, is certainly not ‘the powerful incentive’ the industry expected.
“If the New Homes Bonus is successful in increasing the number of new homes that are granted planning this year it will still take much longer before the industry is able to make any serious dent in the housing shortfall. The suggestion by the CPRE that the New Homes Bonus is illegal could also delay the implementation of the Localism bill which has already been hit by setbacks.”
Date Published: 18 February 2011