New build price growth cools in October

New build price growth cools in October

In the year to end October 2017 new build house prices rose on average by 5.0% across the UK which is down on last year’s figure of 6.0%, according to the LSL New Homes Index.

If Greater London is taken out of the calculation and a crude average of the remaining regions is taken, then the average house price growth is 4.2% which is slightly down on last year’s figure of 4.6%.

The latest Mortgage Market commentary from UK Finance says that housing market activity has been growing modestly since the start of the year. They note a shift in activity away from London and the South East towards the North and Wales and Scotland.

“It seems that UK property transactions are running at around 1.2 million per year and have been at this level for the past two years,” the LSL Homes Index said.

UK Finance’s ‘Mortgage Market Commentary’ noted that whilst total transactions have changed little over the past two years, there has been an increase in First Time buyers and a fall in buy to let buyers, with those that already own and are moving, remaining unchanged.

“In truth, the growth of new homes sales at the expense of second hand homes since the 2008 crash, is probably down to house builders creating a more desirable product,” the index said. “If a further increase in housebuilding is to occur then any new build private sector sales will need to continue to deliver excellence. In the present economic environment, it doesn’t seem as if the total volume of residential sales is going to get any bigger. And if the pie isn’t getting any bigger, the new build sector will need to claim a larger share of it to achieve a further increase in output.”

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