In the year to end September 2016 new build house prices rose on average by 5.8% across the UK. The regional picture continues to show a North/South divide, with crude average growth (excluding Greater London) now standing at 4.2%, down against last year’s figure of 4.4%, according to the LSL New Build Index.
Shaun Peart, Managing Director of LSL Land & New Homes comments: “Greater London has retained a slight lead over other regions, with a growth in new build house prices of 9.1%, which is down on last year’s figure of 10.1% The South East is in second place for growth at 7.4% closely followed by the East Midlands which achieved 7.1% growth. The South West maintained their growth rate at 6.6%. East Anglia fell back to 5.5% new build house price growth, and West Midlands fell back further to 1.6% This is below the low last month of 3.3% in the West Midlands and is significantly lower than September 2015, when growth in new build house prices in the region was at 5.4%. Prices in Scotland show the greatest growth in new build house prices in the North, at 4.3% compared with 3.2% in 2015. The North West has decreased slightly against last month at 3.4% but remains ahead of the rest of the North region in our report, with Yorks and Humberside sitting at 2.4% and Wales at 2.5%. The North East has maintained positive growth at 0.7%.”
First Time Buyers
The First Time Buyers HPE Index looks at the average cost of buying a 70 sq m 2 bed home in each region. It compares the property price with the gross average earnings of a full time employee in that region. New Government figures were released in August that show an improving picture for new buyers. On average a 70 sq m home costs the equivalent of 4 years and 4 months gross earnings, which is an improvement on the five and a half years previously reported. There remains a wide regional variation in this figure, but only London and the South East require earnings above five years. A new starter home on an average salary is most easily afforded in the North East and Yorkshire & the Humber. However house price growth is still relatively slow in these regions, whereas the East Midlands shows strong house price growth as well as a good level of affordability.