House Prices On New Builds Rise For 2 Consecutive Months

Research carried out by an online source for new build property in the UK – Smart New Homes – showed that house prices on new builds have been rising for 2 consecutive months, possibly signaling a recovery of the housing market. In October 2009, an average new build house was priced at £214,909, marking a 1.3% increase, which might have been caused by low stock level and increased demand from buyers. In addition to this, Smart New Homes’ experts highlighted that the pace of house price decline on new build properties eased in the recent months. As such, house prices were only 7.5% below the level of 2008, representing the lowest year-on-year decline in 5 months. The figure compares to a 10.2% annual fall registered in September 2009. Commenting on the research findings, managing director of Smart New Homes, Mr. Bexon, claimed that the increase in house prices on new build properties is a positive sign that is expected to lead to sustained recovery of the housing market. He, however, had to admit that the nationwide figures, revealed by the firm, have been adjusted. In fact, Mr. Bexon said there are wide geographical variations in house prices across the UK. For instance, house prices on new builds in London grew by 4% in October because of extremely low supply, while house prices on new builds in the West Midlands dropped by 0.2%. Mr. Bexon mentioned that Smart New Homes registered a return of cash-rich investors, who are looking for higher returns than those that UK banks currently offer. The increased activity of buy to let investors can also be explained by the willingness of UK lenders to offer buy to let mortgage loans. The figures published earlier by the Council of Mortgage Lenders suggest that buy to let mortgage lending rose in the 3rd quarter of 2009 for the first time in 2 years.