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New build bounces back

20th June 2008 | back to article listings BACK    print this article PRINT

At a time when the price of homes has been dipping investors may have wondered what sectors of the market are showing either a resistance to trends or the ability to recover.

In the former case, Scotland and Kent have been cited as two locations which may put in a robust performance to stave off the worst of the credit crunch. Both, of course, are regions that enjoyed strong price growth last year, but for different reasons have been tipped to hold up well.

Scotland should see only a "sensible" price correction after a slightly overheated market developed in the past year, Mairi Eckford, the managing director of Countrywide Estate Agents, told the Herald. She added: "We haven't had the same increases in house prices [as in England]. We have had a brisk market but we haven't had rampant increases so we won't see the same decreases."

The synopsis for Kent is different. Asprey Homes has pointed to a recent Royal Mail survey showing that 5,068 house moves into Kent came from outside its boundaries last year, more than any other county. The builder attributes this to the many attributes of living in the county, be they economic, scenic or lifestyle elements. But the continued maintenance of high property values will be partly the result of developments such as the new high-speed rail links to London, plus the new Channel Tunnel stations at Ebbsfleet and Ashford.

Yet while the issue of resilience in the property market may be one of locality, it appears that the specific attributes a home has may play a part in its ability to recover. This looks to be the case with new build homes, at least on the basis of a new survey by SmartNewHomes.com.

The firm revealed that the average price of a new home was up by 0.3 per cent in May from April's total, making the current figure £258,856. While this still trails the figure of 12 months earlier (£260,832) by 0.8 per cent, it is also the case that the average price has risen by 1.2 per cent in the past three months. Such a trend suggests that after a significant drop in prices the recovery is well under way. One specific statistic which may lend weight to this view is the finding that new apartment prices were up 0.9 per cent in May, the first increase in 2008.

Of course, rising prices are not the ideal for all investors. For example, Tees Valley estate agents have been telling the local paper the Evening Gazette that a large number of buy-to-let investors are making the most of the bargains that the market is currently offering. As lettings agent Nathan Robertson of Barclay Elsdon Lettings in Saltburn told the paper: "Savvy landlords are buying up two or three properties and renting them out."

So it seems that while for many the most important issue is where house prices are holding up or even recovering, others see the cheaper prices on offer as very good news

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/4238.html. Alternatively, please see our full press release archive.

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