The UK housing market is well on the road to recovery following the difficult months of 2005, according to the latest monthly report from SmartNewHomes.com. 

The average price of a new home on the new property website, covering almost 90% of the new homes currently for sale in the UK, was £255, 065 in January 2006. This is 0.1% higher than the previous month and 0.3% higher than three months ago.

Demand prices, measured using the price homebuyers indicate they are willing to pay for a new home when searching on the website, have shown strong growth over recent months. The average demand price is at its highest level ever, up annually for the first time in five months, 3.1% higher than the same time last year and 0.9% higher than last month. This suggests that consumer confidence in the market has returned, suggesting that activity will pick up over the following months and, as a result, prices should experience more positive growth throughout this year.