The average price of a new home in the UK in February 2005 was £258,822 – 1.4% lower than the previous month but just 0.3% down from the same time last year indicating that positive price growth may be just around the corner.

The figures come from SmartNewHomes.com’s monthly report for February and the smallest annual decrease for four month backs up the members of the Bank of England’s Monetary Policy Committee comments that the housing market remains robust, say the firm.

In addition, the new homes internet site also measures the price homebuyers indicate they are willing to pay for a new home on the website; now 9.1% higher than the same time last year demonstrating the continuing demand for new homes and consumers’ propensity to pay more for their property.

Regional variations

Regionally, the South West and Wales showed strong growth over recent months, whilst the West Midlands and the North have seen prices in their areas decrease. New homes in London decreased over much of last year but have risen since the beginning of the year as the capital returns to positive price growth.

Apartments hit new high

The proportion of new apartments for sale in the UK reached its highest ever level last month, comprising 55% of all new homes compared to just 33% nine months ago, whilst the share of detached homes fell to a low of 30%, from almost 45% last year. This reflects the continuing effects of government planning guidelines leading to an increase in urban regeneration and mixed-use schemes from house builders.

David Bexon, Chief Executive of SmartNewHomes.com, comments: "There is a definite feeling that the housing market has been through its worst and prices are looking likely to start increasing again in the near future."

"Consumer confidence is still high and has been boosted by the recent dip in prices as many buyers feel they are now getting a more competitive deal. It is just a matter of time before this confidence is translated back into sustainable price increases throughout 2005."