Nationwide: price of new homes rises for first time since 2007

Figures released on Friday by the building society found a new UK home was about £164,000, compared with £158,000 in the previous quarter. The new-build market peaked two years ago, when the average cost of a dwelling was £192,000.

The figures were backed up by housebuilder Countryside Properties, which said it had put up prices across five sites in south-east England.

Alan Cherry, chairman of Countryside, said the increases of between 3% and 8% for family homes exceeded earlier forecasts. He said, “It’s the first time we’ve seen an opportunity to put up the prices for a long time”. He said he thought the rise was explained by increased availability of mortgages.

“We’re still cautious and worried we could see a double dip as unemployment rises and the election brings uncertainty.”

Meanwhile, the Halifax reported that prices in the second hand market had risen 1.6% in September, the third monthly increase in a row. It attributed the rise to low availability and increased affordability.