According to figures released by SmartNewHomes.com, new home demand prices across the country fell slightly last month, indicating an easing up of 2003’s strong property price rises.

The index tracks the location and price homebuyers are willing to pay for new properties searched for on the company's web site revealing that the average price a homebuyer was willing to pay in February 2004 was £209,312.

This is down 0.7% on the month, and 5.6% on three months. These falls should be set against the context of sharply rising prices in 2003 (up 9%). Hence prices are still up 3.8% on the same time last year. Despite this being a small annual increase, it still signifies an ongoing healthy market, albeit at a more sensible pace.

Annually, all regions apart from London were up, with the strongest increases felt in Yorkshire and Humberside (9.8%), Wales (7.9%) and the North (7.9%).

London and South East Prices Level Out

London and the South-East remain the most expensive areas in the country, with homebuyers willing to pay in excess of £250,000. However, the slowdown is hitting the top end of the market first, as London became the only region where prices were lower than a year ago.

Apartments popularity slows

Intense activity in the buy-to-let market over the last six months of 2003 led to apartments rising in popularity to dominate property searches, reaching a high of 47% in December 2003 compared with 39% for detached homes. However detached houses are now making a comeback and have regained the top position, with 43% of searches taking place for this property type in February, compared with 41% for apartments.

This levelling out of the popularity of apartments has been reflected in demand prices, with apartments the only property type to decrease in price over the last year (down 0.9%) in comparison to detached houses whose prices rose by 7.8% to an average of £268,455.

Moderate year ahead

David Bexon, Chief Executive, SmartNewHomes, commented: “The price homebuyers are willing to pay for a property reflects economic and personal circumstances. Following the huge boom in demand seen last year, recent interest rate rises have prompted homebuyers to start searching out keener prices.”

“Nevertheless prices are still well up on this time last year and the market is still strong. We expect prices will continue to rise, albeit at a more realistic rate.”