Andy Frankish, New Homes Director at Mortgage Advice Bureau (MAB), comments:
“Today’s figures show homebuyers purchasing new build properties have experienced greater annual house price rises than those buying pre-owned properties. New build properties are not immune from house price growth, and government schemes such as Help to Buy have stoked demand for this type of property among consumers. However, the typical new build house price is still lower than the national average, and financial assistance in the form of the equity loan scheme means this can be a much more affordable route onto the property ladder.
“While purchasing a new build property can be cheaper than buying a pre-owned property, the fact remains that there are simply not enough new homes being built. Although property completions have risen slightly, house building starts fell 14 per cent in Q2 2015 compared to the previous quarter, leaving the supply of new homes way behind target.
“Today’s Inflation Report from the Bank of England emphasises that there is ever-increasing demand for house purchase, and it is no secret that consumers are jumping on the property ladder to make the most of the rock bottom mortgage rates before interest rates rise. It is therefore essential that new properties are brought on to the market, not only to cater for rising demand, but as a long-term solution to prevent excessive increases in house prices.”