New homes hit record price in October as supply dwindles

Housing and construction New homes hit record price in October as supply dwindles Prices of newly built homes overtake those for property sales by 1% New homes in the Scottish capital. Photograph: Fermanagh &…

New homes hit record price in October as supply dwindles

Housing and construction New homes hit record price in October as supply dwindles Prices of newly built homes overtake those for property sales by 1% New homes in the Scottish capital. Photograph: Fermanagh & Omagh MLA. Photos: Andrew Milligan/PA

As house price growth plunges in other parts of the UK, the average house price in Scotland hit a record high of £222,389 in October – more than the average UK house price of £212,511.

The Land Registry, which collects property data from surveys, said the price of new builds was 1% higher than the average selling price of £223,380. For new build properties overall, the price rose 2.7% in the year to October.

The upturn in new house prices this year follows a two-year period of decline after the financial crisis, which pulled prices down in 2008 and 2009.

New builds, however, are still far from a market recovery. With house building and prices of new builds yet to pick up as strongly as a buoyant, housing market in the north of England.

Housing market developers face a bleak outlook due to the lack of housing stock in the UK. Housing minister Gavin Barwell said: “Our new houses programme will get builders back to work building more new homes in the next couple of years.”

New construction starts in the UK reached an all-time high in April of £8.2bn – up 8% year-on-year.

But the National House Building Council said last week it was concerned that the government’s new housebuilding incentives – delayed by over two years – could derail the recovery.

The NHBC said that even if the housing market begins to pick up, the construction industry will be facing a shortage of skilled builders and equipment.

The council’s chief executive, Geoff Whitmore, said: “This very strong September construction result is a welcome boost, but building new houses will continue to be a protracted process and many parts of the country will continue to have high levels of house shortages into the 2020s.

“We need a robust and sustained supply of affordable housing to meet the rising demand that is driving the housing market. The extra £10bn to housebuilders, along with the new urban shortfalls announced by the government, are welcome steps to help the housing supply in the short term, but bigger, more strategic changes are still needed to achieve a comprehensive sustainable supply of UK housing”.

Mike Pryce, head of residential at estate agent Savills, said: “The housing market is undoubtedly showing signs of life after four years of stagnation, but there is very little sign of any boost from the government’s affordable housing incentives, which are being delayed for two years.

“It is likely to be another year or two until there is a firm recovery and a net injection of new money into the building sector, which will see the recovery accelerate. Nevertheless, it will be welcomed by both the builders and the residential sector.”

The west of Scotland, home to Northern Rock, is still experiencing the steepest fall in prices, with the average of £153,459 far below the £201,032 recorded in the rest of Scotland. The north-east had the lowest average property price across the country at £101,920.

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