December saw the average asking price for new homes in the UK increase by 1.2% compared to November, according to Smart New Homes. The fourth quarter of 2011 saw consecutive monthly rises with prices increasing by 2.6%, while the annual growth rate was 3.2% in 2011.
This is significant as it is the first year to show positive growth since 2006, and the average price of a new home is now £227,098 which is £7,029 more than December 2010. Although the market for new homes continues to show price stability, the same can't be said of the general market which saw prices decline over the last quarter of the year. Asking prices for new homes are now more than in the general market for the first time since March 2009.
The largest annual price growth for last year was in the West Midlands where prices increased by up to 12.6%. In London prices fell by 7.8% over the year and by 2.2% during the fourth quarter, but rose by 3% in December. There were fewer new homes coming onto the market during the last quarter of 2011 as many developers chose to delay projects until New Year, but annual growth was still 10.2%.
The largest house builders also saw the number of completions increase last year compared to 2010, and many have purchased more land. Apparently most new homeowners are looking for a property with contemporary design which can cater to modern-day needs. Builders have also managed to maintain affordability through introducing new mortgage products, and the industry is also working with the government for the introduction of its new mortgage indemnity product later on this year.
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