New-build prices drop

Posted: 16 Feb 2007 10:03:33 GMT

New-build home prices fell 0.3 per cent in January as buyer confidence declined in the face of interest rate rises, research for SmartNewHomes has shown

New-build home prices fell 0.3 per cent in January as buyer confidence declined in the face of interest rate rises, research for SmartNewHomes has shown.

The fall was the greatest drop in final sale prices for new homes in more than ten months, suggesting that homebuyers are nervous about taking on large mortgages.

"We are currently witnessing the effect of the November interest rate rise, but the further impact of January's increase is still to be felt," said David Bexom of SmartNewHomes.

"The decision to increase rates in January came as a shock to many, sending waves through the market as potential buyers reconsidered the implications of taking on additional debt as a result of stepping up the housing ladder."

Semi-detached new home prices were also down 1.3 per cent to £238,341 in January, along with apartments, which dropped 0.4 per cent to £231,523.

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