Prices of new build properties have reduced by -7% as price inflation has eased and housing market activity is subdued across the country.
Latest data from the Office of National Statistics (ONS) shows the prices of new build property in England over the month to March 2017 is -7.0% down and average cost of a new home is £285,112.
London has the largest decrease of -8.5% with the average cost of a new home at £477,877 and the smallest fall is West Midlands of -5.7% with house cost of £243,932.
Over the month new and existing property prices in England are -0.6% lower on average with the largest fall in London on -1.5% followed by the North East with -1.3% and only Wales has seen an increase of 1.4%.
The monthly fall in the cost of homes is good news for first time buyers as now they require a smaller deposit or lower earnings to afford to purchase their first home.
London house prices slowing
More boroughs in London are experiencing a slowdown in house price growth with some falling over the year.
Average prices and annual change in London for March 2017 from the ONS for the top ten boroughs are shown below.
| London borough | House prices |
Annual changes |
|---|---|---|
| Haringey | £571,511 | 12.0% |
| Havering | £362,983 | 9.6% |
| City of Westminster | £1,055,350 | 8.7% |
| Barnet | £554,735 | 8.1% |
| Croydon | £367,160 | 7.3% |
| Kensington And Chelsea | £1,425,428 | 6.6% |
| Hounslow | £406,976 | 6.5% |
| Bexley | £334,053 | 6.3% |
| Harrow | £480,348 | 5.8% |
| Enfield | £396,260 | 5.7% |
Only two central London boroughs are in the top ten, City of Westminster and Kensington And Chelsea and eight boroughs are outside the city where the property prices are lower.
The more expensive areas such City of London is lower by -6.4% or £50,864 with average house prices of £743,781 and Islington down -4.8% or £30,921 and price of £615,100.
Even areas with cheaper homes in Tower Hamlets are down -5.3% or £25,013 with average homes costing £444,397 and Southwark down -3.5% or £18,029 and cost of £495,327.
With lower house prices in the capital buy-to-let landlords may find more affordable properties to buy that can help improve rental yields.
For home movers the price gap may reduce between their current home if prices are rising and the next home if they buy in a borough where prices are falling making their move more affordable.
Housing market remains subdued
According to the Royal Institute of Chartered Surveyors (Rics) housing market activity remained relatively subdued with new buyer enquiries and agreed sales remaining unchanged since the start of the year.
Average prices and annual change for the UK to March 2017 from the ONS are shown below.
| Area | Annual changes | Property values |
|---|---|---|
| London | 1.5% | £471,742 |
| South East | 2.8% | £311,514 |
| East of England | 6.7% | £277,127 |
| South West | 2.8% | £240,222 |
| England | 4.4% | £232,530 |
| West Midlands | 6.5% | £180,293 |
| East Midlands | 6.7% | £176,213 |
| North West | 6.2% | £150,250 |
| Yorks and the Humber | 4.0% | £149,606 |
| Wales | 4.3% | £147,746 |
| Scoltand | 0.7% | £137,139 |
| Northern Ireland | 4.3% | £124,007 |
| North East | -0.4% | £122,298 |
On a month-by-month basis only two regions have increased, Wales by 1.4% and West Midlands by 0.3%.
The other eleven regions have seen decreases in the last month with London down by -1.5%, North East lower by -1.3%, Scotland by -1.0% and Northern Ireland down -0.8%.
This has impacted on the annual growth in prices, especially in London now up only 1.5% on the year although the East of England and East Midlands are leading the market with 6.7% growth over the year.
For remortgage buyers the fall in property prices in London means there is less capital available for capital raising such as making home improvements.
A fall in house prices means the older equity release mortgage buyer is offered a smaller amount from their property or find they cannot take any further lump sums from their home.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or are a buy-to-let investor.
Learn more by using the property value tracker chart, mortgage monthly costs calculator and equity release calculator. Start with a free mortgage quote or call us and we can take your details.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property for home improvements, holidays or even give to a family member.
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