It’s no doubt that the Spending Review has brought even more positive news for the house building industry - with new Schemes and Initiatives announced that will help even more people realise their dreams of home ownership but what about current new build prices? Shaun Peart, Managing Director for LSL Land & New Homes comments: “In some parts of the country prices are lower than they were at the height of the previous cycle, around the mid 2000’s, whilst some prime London Boroughs have seen close to a doubling of prices since the last downturn. And whilst wages are now growing in real terms, this follows a long period of economic instability with big question marks arising about the potential effect on mortgaged households of even a slight increase in the base rate.
In terms of Year on Year house prices for new builds, the overall price index remains relatively static at 6.1%, which is slightly down on last Octobers figure of 6.4%, and last month’s figure of 6.5%. – as the graph opposite illustrates.
As can be seen from the graph overleaf East Anglia and Greater London are converging, with the prospect of East Anglia taking the lead as the highest price growth region, by the New Year. In the year to October 2014 Greater London was seeing Year on Year price growth of 15.4% and over the past year this has steadily declined to stand at 9.4%. So the overall reality in Greater London appears to be a market that is close to flat with each month of low or zero growth pulling the annual figure a little bit lower. But much of the price growth in recent years in Greater London has occurred close to the centre where prices are highest and this slowing of price growth could simply be reflecting a move to lower priced areas along the transport lines....
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