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New home prices fall back slightly in UK but up on a year ago, latest index shows

The average price of a new home in December was £229,571, down 0.8% over the month although some areas saw prices increase.

According to the latest monthly index from SmartNewHomes prices rose the most in Greater London where they were up 4% to £428,605 on the previous month and recorded an annual rise of 6.1%.

New home prices also increased in 2.1% in Scotland to an average of £231,906 but are still down 0.7% on a year ago. They also increased by 1.5% in Yorkshire and Humberside to £181,612 and are 2.6% above a year ago.

The South West also saw new home prices rise in December, up 1% on the previous month to £261,630 but are down 1.5% compared to a year ago. Prices remained flat in the North East at £174,591 and are 2.5% above a year ago.

Prices fell the most in East Anglia, down 3.2% to £220,725 but are 4.8% above a year ago. Prices were down 2.9% in Wales to £190,458 and are 3.8% above a year ago and were down 1.4% in the South East to £296,655 and are 5% above a year ago.

New home prices also fell in 0.9% in the North West to £170,512 and are 4.7% below a year ago. In the West Midlands they fell 0.5% to £165,010 and are 2.5% below a year ago. And in the East Midlands they fell 0.1% to £203,271 but are 4.8% above a year ago.

Steven Lees, director of SmartNewHomes, said that overall a relatively flat fourth quarter in 2012 for the new homes market was bolstered by strong price growth at the beginning of the year.

‘This has resulted in solid price growth. Strong and sustained demand for new homes, particularly from first time buyers eager to take advantage of the shared equity schemes available from house builders and the government meant that prices fluctuated by only £10,000 across the year. This compares to £22,000 in the wider market,’ he explained.

‘Growth in the number of new homes coming to market for buyers is a positive marker in a year that saw the government announce countless new measures to get Britain building. We will see during the year ahead whether this talk translates into new homes for many thousands of potential buyers,’ he added.

Using a three month rolling average, the number of new homes added to the market grew by 52% annually in December, which Lees said shows a significant improvement in supply compared to the same time in 2011.
 
January is expected to bring a further boost as many house builders opted to delay the launch of new phases and developments until the New Year.

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