House prices set to recover

House prices for new homes have stabilised [photo:Pixmedia]

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Monday, 09, Jan 2006 04:30

As 2005 drew to a close, there were increasing signs that house prices were set to recover, SmartNewHomes.com has found.

At the end of December the average new home cost £255,713, down four per cent from the end of 2004, and after nine months of annual decreases in a row.

But in the last few months house prices have been stable, with no change between October and January, and a dip of just 0.1 per cent in the last three months.

This has offered hope that house prices for new homes will start to rise again soon.

"Although 2005 has been a somewhat difficult year for the housing market and the new homes market in particular, it is promising to see signs that 2006 is looking brighter," said David Bexon, managing director of SmartNewHomes.com.

"Shorter term price changes, more indicative of the way the market is turning, have been showing for several months that an upturn is imminent and we confidently expect a return to positive inflation within the next couple of months, albeit at a more realistic and steady rate than that of recent years.

"Evidence is also present of increasing consumer confidence and as buyers realise that the market is over the worst, prices will begin to creep up again and activity levels will become healthier."

Regionally, house prices in the west Midlands and north-west are recovering best from the year-long slump, with the south-east and London also seeing a more steady recovery.

House prices for new homes in Scotland and Wales remain stable, but Yorkshire and Humberside, the East Midlands and the north have all witnessed falls in prices over the 2005.

"Generally, it has been the more expensive regions which have seen prices recovering sooner, but the cheaper regions such as Yorkshire and Humberside and the East Midlands are the ones which are most likely to see the most significant increases over the coming year," said Mr Bexon.

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