New homes sector bucks downward trend

Despite the recession and the general lull in the housing market, sales of new homes have been rising across many parts of the country, suggesting that the new homes sector is bucking the downward trend.

Yesterday, Bovis Homes became the latest housebuilder to report a surge in new homes sales, after increasing the number of its active new homes sales outlets by 21% to 82 during the first half of this year compared to 68 in the corresponding period in 2011.

Bovis Homes said it completed 944 new homes in H1 2012, compared with 801 in the same period last year. The average sales price of a new home also increased to £164,000 from £163,400.

Yet, the company, like many residential property developers nationwide, is projecting further growth in sales and profits this year.

So why is the new homes sector going from strength to strength?

Katie Hunter, new homes manager at Waterfords estate agents, says that new homes are growing increasingly popular with buyers because they are attractively priced in today's market.

"It certainly doesn't surprise me that the new homes sector is bucking the housing trend as in today's market you can purchase a new home for the same price as a resale property," said Hunter. "Historically, a buyer would have to pay a premium for a new build property where as now sales prices have come in line with the rest of the market."

She added: "Purchasers are finding they get a lot more for their money buying a new home and are currently reaping the benefits that a new home has to offer. This in itself is giving new homes added appeal to far more buyers. Without a premium to pay, buyers who originally thought that a new home was out of their reach are quickly realising that they can actually afford to buy one."

The high specification of fixtures and fittings in new build homes, along with the fact that they are generally far more energy efficient, resulting in low running costs, generally appeals to homebuyers, according to Simon Grier Jones, head of Land at Hamptons International.

Mr Jones believes that new homes are bucking the downward trend "due to product differentiation between new and second hand houses".

He added: "When finances are tight people focus on net disposal income. Running costs matter more than ever with high energy efficiency of new build versus more inefficient Victorian homes for example. Developers are now at last building better, more efficient houses, tailored to the demands of the public. They are building more what the purchaser wants than what the planners allowed them to build in the last decade, this certainly seems to be reflected by the recent Bovis [Homes] and Bloors [Homes] schemes."