New homes prices stabilising

This is according to SmartNewHomes.com, which found the level of annual growth remained at -13%, although it has held around this level since the start of 2009, showing continued signs of stabilisation following the progressive downturn seen during 2008.

Commenting on the data, David Bexon, managing director of SmartNewHomes.com said: “There are now clear signs that a floor has been reached for new home prices. I believe it is not simply a spring price bounce that we are currently experiencing, but a correction in price growth.

“In the new homes market, prices have been brought down to a level that buyers expect to pay. With early signs of improving mortgage availability, and the steady effectiveness of developers’ own assistance initiatives, sales activity is slowly showing the potential for returning to some degree of normality.

“However, any level of improvement is only likely to work to support the industry at this stage, which has been hit hard by loss of revenue, decreasing land values and redundancies during the credit crunch.

“New home starts remain extremely depressed, and the Government has so far fallen very short offering any measures to significantly boost production.”

“Current buyer expectations are actually higher than new home stock prices, which indicates developers’ willingness to remain conservative in order to secure sales. As stock runs lower, I expect to see new home prices rising slightly, although I do not anticipate a return to sustained price growth for some time yet.”