The new homes market has now recovered from its winter seasonal dip, and is up 7.6% from the beginning of last year. Prices of new homes increased by 2% last month alone, according to a website tracking how much people are willing to pay for new properties.

Rising demand prices have been supported by lenders offering higher income multiples, especially to first time buyers, the company, Smartnewhomes.com says. The average price a homebuyer was willing to pay in March 2004 was £213,569.

Wales and the North top risers

Price rises were reflected across the UK with increases in all regions except Scotland and London. The sharpest increases were in Wales (13.8% since March 2003) and the North (9.8% since March 2003) with the North West, Yorkshire and Humberside also performing well.

London prices falling

London was the only English region to experience monthly price decrease, down 1.6% over the month. The average demand price in London reached £248,697 - 12% lower than a year ago and its lowest point since the end of 2002, indicating that prices for new homes have peaked in the capital.

Return of the Semi

Semi-detached properties saw the highest annual increase in demand price of 14.5%, compared with an average rise of 4%.

The trend for apartment living which took off during 2003 looks set to be hit by the comeback of the house, as the number of buyers looking for detached houses rose to its highest level for almost a year. March 2004 saw 41% of buyers looking for detached homes, compared to 43% looking for apartments. This is compared to three months ago when apartments dominated and one year ago when detached houses were prevalent (each with a 47% share).

South West migration bandwagon continues as other regions catch up

SmartNewHomes.com’s migration index, measuring the number of homebuyers searching in a region compared to the number registered there, shows that many Londoners are looking to move out of the capital. Other areas with ‘negative’ migration are the West Midlands and the South East. The most popular region to move into is the South West with Yorkshire and Humberside and Scotland also popular.

David Bexon, Chief Executive, SmartNewHomes, commented: “The rises we have seen over the last month indicate that the market has fully recovered from its annual seasonal dip.”

“The increasing demand for new homes, which we are seeing across the UK, is a possible reflection on lenders recently increasing their salary multiples whereas in London, buyers are showing resistance to the high price of new homes schemes throughout the capital.”