In the year to end February 2017 new build house prices rose on average by 5.3% across the UK which is approaching 2% down on last year’s figure of 7.0%, according to LSL Land & New Homes.
Looking at the big picture it appears as if the North is seeing a steady uplift from a low base which will be starting to take prices above the levels last seen in 2007, the year before the market crashed, LSL Land & New Homes said. Over the past nine months there has been a slow uplift from 2 to 3% across the North.
The South has generally seen a few years of reasonably strong annual growth at around 6%, but this now seems to be weakening a little, with a slow decline in the growth rate being evident over the past six months.
Greater London has had many years of growth since the 2007/8 crash, with prices nearly doubling in many areas, but again the heat is coming out of the market, with reports of price falls in prime areas. If the dip of the past two months continues then it is likely that the rate of growth will fall to its lowest level for some years.
In February 2016 East Anglia had seen the fastest annual house price growth with a gure of 9.1% but in the year to February 2017 this region has fallen to 5th position at 5.1%. Greater London continues to have the highest growth rate at 8.6% which is roughly unchanged on last year’s figure of 8.5%.
The East Midlands at 7.3% has taken the second position from the South East at 6.6% with a respective rise and fall of about 1%. Wales has moved up to fourth position with growth of 6.3% which is a large increase on last year’s figure of 2.2%.
Of the remaining regions, the North West and South West are both close to 5%, and there is then a marked step down to Scotland, West Midlands, Yorkshire & the Humber which all have around 2% year on year growth. Finally the North East is just getting back into positive territory.
“The DCLG Housing Statistical Release on new build dwellings came out last month and makes interesting reading,” said LSL Land & New Homes. “In the final quarter of 2016 new build stats in England were 143% above the trough in the March Quarter of 2009 but are still 15% below the peak quarter of March 2007. This is a sure sign that the industry is doing well. Private sector start in the final quarter of 2016 were 4% ahead of the previous quarter and 15% ahead of the same quarter last year.
“In recent times there has been quite a lot of noise from the estate agency sector that there is a shortage of property coming to the market for them to sell.
“But when total sales volumes in England for the above time periods are considered some interesting comparisons appear. In the year to the third quarter of 2016 all England residential sales stood at 867,874 which is less than 2% above the figure for the same quarter last year, yet private sector new build starts look to be about 15% ahead.
“Similarly the peak annual sales volume figure for England was reached in Q2 2007 at a figure of 1,294,148 which is nearly 50% above the figure for the year to Q3 2016, and yet at that time new build starts were only 15% above present levels.
“The clear indication is that new building is growing to fill the void left by the shortage of second hand property, or put another way, new build is becoming a more popular choice of housing.”