New build prices remain steady, despite increased activity

The average price of a new home fell 1.1% in July 2009, from £214,846 in June to £212,440, according to Smart New Homes.

Managing director David Bexon said: “There are positive signs that the decline in annual new home price growth has now passed its lowest point, having returned to a level seen for much of this year, following a single drop below -15% in May.

“Reports from developers over the last few months suggest an improved outlook for the year ahead. The eagerness of buyers to secure a property before prices start to rise, and the range of incentives offered by developers to assist them with their purchase, has resulted in some extremely positive summer sales figures being recorded, and subsequent announcements that the likes of Persimmon and Barratt plan to commence construction on new schemes in the latter part of the year.

“However, it is a tentative step towards revival for an industry left severely battered by the credit crunch, and many developers will wait to see what the autumn market brings, before conducting any significant review of their pricing strategies.

“I believe it is inevitable that we will soon see a return to stronger positive price growth for new homes, but it will probably come with the release of new developments later this year, as opposed to existing stock waiting to sell. It is impossible to ignore the problem of supply against demand, as more and more industry bodies issue stark warnings on this. It is down to the new homes industry to feed this demand but it is now facing a major catch-up operation, having been left largely to fend for itself by the Government during the ongoing financial crisis.”