New home sales increase while re-sale property asking prices drop – will this lead to more unoccupied property?
House builder Bovis has reported a doubling of profit and an increase in the price achieved for new sales compared to last year. This is while the property sales site Rightmove report a fall in the average asking price of 2.2pc compared to a normal decrease in August of half that figure over the past 10 years.
The average selling price for Bovis was £164,400 while the average price on Rightmove was £236,260. There is a big difference, however we need to remember that Bovis doesn’t build many high end properties with a value of £500k plus whereas Rightmove has access to the whole market.
I am sure our readers will understand why new build property sales are increasing with the various deposit incentives and mortgage deals attainable though new home providers.
Those selling second hand property do sit at a disadvantage. Reluctant to recognise a reduction in their assets value, sellers are tending to leave property on the market making slow small reductions in price or they opt to move on leaving the property unoccupied or rented out.
Many builders are PLC’s and selected to undertake harsh write-downs early in the recession to the value of remaining assets such as land and property built but not yet sold. If you are a PLC, it seems that one or two very bad results down to a level where ‘the only way is up’ is better than continuous small write-downs producing small losses every six months for a sustained period.
Those people unable to sell leaving homes unoccupied must remember to protect their property with specialist unoccupied home insurance otherwise they run the risk of losing more money in case of an insurable loss at the property.