Price of new homes in the UK up by 1.9% last month, latest index report shows

The average price of a new home in the UK was £236,122 in April 2013, compared to £231,797 in March, a monthly increase of 1.9%, the latest new homes index published today (Monday 20 May) shows.

On a quarterly basis the price of an average new home has increased by 1.8% and on an annual basis it is up 4.1%, the index from SmartNewHomes also shows.

Average prices have risen across most of the country. The biggest monthly increase was in Greater London, up 6.8% and outside the capital city Yorkshire and Humberside saw the highest monthly price growth of 4.4%.

 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 using a three month rolling average, the number of new homes added to the market fell further in April. The firm expects the number of homes coming onto the market to increase following the encouraging news from NHBC that new home registrations have increased by 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.

‘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,’ said Steven Lees, director of SmartNewHomes.

He pointed out that the premium of living in a new build property in London continues to soar, exacerbated by continued strong interest from wealthy foreign buyers and a lack of supply. According to recent research, over 60% of the capital’s new homes are being bought by international buyers, often off plan.

‘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,’ he explained.

‘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,’ he added.