The quarterly figures from the SmartNewHomes index also suggest that price growth has slowed in recent months with average prices down 1.9% quarter on quarter.
Annual growth dropped back from an unsustainable high of 7.9% in September to 3.8% in October. A new home now costs on average £8,429 more than the same time last year.
The data also shows that a new home now costs 5% less than in the wider market as house builders continue to price realistically.
Six out of the 11 regions covered by the index recorded positive monthly price growth in October. The eastern regions consolidated their strong price growth seen in September with only London and the South East seeing prices slip 3.1 % and 0.7% respectively in October. Wales recorded the biggest price fall in October at 1.4% but prices still remain 0.5% above
where they were the same time last year.
The number of new homes available to buy increased in October but was down compared to October 2011.
‘New home prices eased back in October following a wave of previously pent up buyer demand in September. We expect to see annual price growth of 3% this year, with this strong price performance bolstered by growing consumer confidence and the mounting imbalance between demand and supply,’ said Steven Lees, director of SmartNewHomes.
But the market is still fragile and needs support. ‘As NewBuy celebrates reaching 2,000 reservations and the Welsh government announces plans to introduce a similar shared equity scheme to help first and second time buyers, we need to ensure that new homes are readily available and kept at affordable levels,’ explained Lees.
He also pointed out that the news that the European Union could impose a 20% tax on new build homes would render useless every house builder and government initiative intended to get the UK property market moving.
This could mean developers passing the cost of such a tax hike onto buyers, pushing them well beyond reach of most. ‘We hope the government sticks to its guns and reinforces its commitment to the house building industry in its upcoming Autumn Statement,’ added Lees.
