New homes attract stronger valuations

THE new homes market continued to outperform the general market in September despite an increase of almost 300 per cent in the number of homes coming to market, a study showed.

The average price of a new home increased 1.3 per cent to £222,561, whereas figures from mortgage provider Halifax indicated that general market prices fell 3.6 per cent, according to property website SmartNewHomes.com.

Marketing director Steve Lees said the government’s spending review this week shed little light on how ministers planned to meet their commitment to increasing the housing supply.

He said the supply of mortgages for would-be buyers was an equally pressing issue and the government should be prepared to address it.

“The Financial Services Authority (FSA) is currently considering the regulatory framework of the mortgage market with a view to making it more sustainable; the housebuilding community is very anxious that the regulator does not replace the excessive lending of previous years with an overly risk-averse system,” Lees said.

“According to the Home Builders’ Federation, around 85 per cent of developers considered mortgage availability to be a constraint on demand.

“At the moment it is the housebuilders who have stepped in to ‘finance’ the market with their own tailor-made mortgage deals and shared equity schemes, with only a handful of mainstream lenders willing to offer mortgages on new-build homes.

“This situation is not sustainable, and the government needs to demonstrate some joined-up thinking.”