NI is UK hot spot for house price rises

Northern Ireland is the UK’s regional hotspot for house price rises, according to a survey out today.

The cost of homes is rising at a whopping 20% a year according to the latest University of Ulster Quarterly House Price Index produced in partnership with Bank of Ireland and supported by the Northern Ireland Housing Executive.

The quarterly survey, regarded as the most authoritative study of domestic property prices, puts the average price of a house in Northern Ireland at £139,520

Covering 2,772 house transactions between July and September, the survey shows the annual rates of increase ranging from 11.5% for apartments to more than 26% for detached houses.

The authors of the House Price Index – Professor Alastair Adair, Professor Stanley McGreal and Mrs Louise Brown of the University of Ulster – say the latest figures confirm a strong trend of house price increases during 2005.

Prof Adair said: “With an annual increase of 20%, Northern Ireland house prices are out-performing not only the expectations for the local market during 2005 but leading other regions of the UK where the pattern has been for slower growth."

Bank of Ireland’s Head of Research in Northern Ireland, economist Alan Bridle, said: “This year is shaping up to be a record breaker in local house prices.

“One factor at play is the attraction of property as an investment. Despite soaring prices, lenders report no let up in demand for buy-to-let finance or in the appetite of people to re-mortgage homes in order to buy a second property.”

Mr Bridle doesn’t forecast a crash in the local market but says that by 2007 or 2008 the economic climate might not be as favourable and house price increases should moderate.

With 68% of properties in the survey selling for above £100,000, the Northern Ireland Housing Executive is worried about the plight of first-time buyers.

The Housing Executive's Head of Research Joe Frey said: "The big increase in average house prices reflects the fact that smaller numbers of lower priced houses are being sold, as first-time buyers are finding it more difficult to find a deposit and pay a mortgage.

"This in turn is fuelling the buy-to-let market. The Housing Executive is addressing this in a number of ways, including working with Co-ownership Housing Association to look at ways of expanding shared ownership in Northern Ireland.”

All property types showed increases in the third quarter of 2005. Detached houses are the market leader with an overall average price of £214,834, an increase of 26.16% over the year.

Detached bungalows rose by 19.44% to an average price of £182,578. The terraced/townhouse market also performed strongly with an annual increase of 19.31% to an average of £105,048.

For semi detached houses, the annual growth was 18% bringing the average price to £125,563 while semi-detached bungalows went up 22.16% to an average of £121,737.

The performance of the apartment sector, which has been variable over the last few years, was a little weaker than the rest of the market. Apartment prices rose by 11.5% to an average price of £110,988.

(MB/SP)