New home prices remain out of reach for FTBs

The average price of a new home in London fell in the last 12 months, according to Smart New Homes.

According to the firm, a drop of 4.1 per cent was witnessed in the year leading to December 2007.

However, the average price remains high at £420,983, meaning that the average first time buyer (FTB) still cannot afford to make a purchase.

That price is 181 per cent higher than the average cost of an FTB property, despite London prices falling by £18,000.

"While there is no denying that London has outperformed any other region in December, our index shows that new homes are cheaper in London now than a year ago," said David Bexon from Smart New Homes.

"This could be the deciding factor for families who may have been debating whether to stay in the capital or look to upgrade to a larger family sized home elsewhere.

"During 2008, London will remain a market with pockets of activity such as the Olympic regeneration zone as well as in key areas such as Lewisham, Brent Cross and Elephant & Castle," he added.

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