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The credit crunch 'waiting game'

New home prices have continued to fall over the last three months...

The squeeze on credit has also had a dampening effect on the home buying public. Four interest rate rises in the last twelve months have also dented consumer confidence, with potential homebuyers pursuing a 'wait and see' approach.

Apartments still make up the majority of the housing mix at just over 57%. The demand for family homes is still not being met resulting in an increase in incentives and discounts for apartments.

While the average price of a new home (stock price) continued to fall last month, the price buyers are willing to pay (demand price) has increased, showing that buyers have confidence in the new homes market.

FTBs 'rapidly vanishing'

Over the summer, prices have continued to fall. However, prices for new build prices are still up on this time last year. The incentives that developers continue to offer on apartments appeal to rapidly vanishing first time buyers, who are typically looking for a smaller dwelling as a first step.  

With these borrowers having to rely on large loans to get them onto the ladder and house price growth rapidly exceeding the average wage rise, incentives are a welcome help.

All areas of the country have seen a decrease in prices apart from Wales and the South West which have seen a monthly price increase of 3% and 4% respectively.

The second homes market is proving popular in the South West and wealthy buyers and buy-to-let investors are investing in second homes following the summer season and a return from holidays.

Outward migration continues

The ability to work from afar is also increasing, allowing people to spend more time out of London, in their second homes, therefore pushing prices up in these areas.

Outward migration continues for both London and the South East this month, -7.8% and -4.4% respectively. Commuter hotspots still remain popular, with inward migration strong in East Anglia.

The Northern hotspots are still proving the most popular with new home buyers, consequently driving up prices. Strong inward migration continues to be recorded with 4.2% in the North, up from last months 3.8%.

For more information: http://www.smartnewhomes.com