New home prices down

New home prices fell in August, according to the latest set of statistics.

Figures from SmartNewHomes.com show that the average new home cost £259,353 in the month, down 1.1 per cent on July's figure.

However, the firm points out that annually prices increased by 0.3 per cent.

Commenting on the statistics, David Bexon, managing director of SmartNewHomes, said that rising interest rates are to blame for the month-on-month price drop.

"August has clearly shown a drop in prices as earlier interest rises begin to bite. New homebuyers are rightly being more cautious before taking on a bigger financial commitment," he said.

"However, there is still an acute shortage of homes in the UK so demand will remain strong, especially for family homes.

"The autumn will see a period of stability as homebuyers take stock of the market and wait for the next traunch of competitive deals from lenders and more developer incentives," continued Mr Bexon.

The latest house price index from Rightmove showed that prices dropped by 2.6 per cent in August.

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