House prices are rising fastest in Northern Ireland than anywhere else in the UK | Personal Finance | Finance
While house prices across the UK have largely remained falling over the past six months due to increasing affordability pressures, property values in Northern Ireland are bucking the trend.
According to data from HM Land Registry, average house prices in the 12 months to August were little changed in England to £310,000 (0.0 per cent) and fell in Wales to £217,000 by 0.1 per cent. There was a marginal rise of 1.1 per cent to £194,000 in Scotland.
Meanwhile, Northern Ireland had the highest rate of growth in house prices at 2.7 per cent.
According to Halifax’s latest house price index, prices fell across all regions of the UK over the past year. But while the South East of England is said to have faced price reductions as significant as six per cent in the 12 months to October, Northern Ireland saw a smaller drop of 0.5 per cent.
Richard Ramsey, Ulster Bank’s chief economist in Northern Ireland told the telegraph: “Due to rising rental prices amid a severe housing shortage in Dublin there has been an increase in interest in property in Northern Ireland.
“Workers from home have enabled workers in Northern Ireland to find cheaper accommodation in the North compared to the South. Private sector rents in Dublin have reached ridiculous levels.”
He added that people can travel from areas such as Newry in Northern Ireland to Dublin in the Republic of Ireland in an hour by train.
According to Tabitha Cumming, property expert from The Lease Extension Companythe region’s “dwindling housing supply” is taking a toll on the upward trend.
Miss Cumming told Express.co.uk: “Prices are rising much faster than anywhere else in Northern Ireland, with the market seeing an annual increase of almost three per cent this year, compared to other regions which have only they have increased by about one percent. .
“While the property market in the area is under the same pressures from the interest rate hikes set by the Bank of England and rising inflation, it is the dwindling supply of houses that is driving up prices.
“Since there are not as many properties for sale, prices are rising as a result. Some prospective sellers are waiting for the market to calm down before listing their homes on the market.”
Echoing that sentiment, Mr Ramsay said many large house builders in Northern Ireland had gone out of business following the last property downturn, leading to a “significant slowdown” in house building over the past year.
John Carrigan, director of property developer Fraser Millar, told the Belfast Telegraph that a lack of infrastructure from NI Water and the challenges of “catching up” with production after the coronavirus lockdown breaks have been linked to preventing more new builds from being implemented.
Mr Carrigan said: “Many housing development sites have been approved, but they cannot actually be built because they cannot connect to the sewerage network. We need to streamline our planning services to approve housing development in order to build it.”
A spokesman for NI Water said the utility “has been warning for some time that underinvestment in wastewater services is putting pressure on the wastewater system and as a result we are unable to support planning applications and new connections in some areas” .
In addition, Miss Cumming said: “The average number of days it takes to sell homes on the market is also increasing.”
However, she noted that some experts are predicting that market pressure will ease in the coming months, which could cause prices to fall again in 2024.
Dr Alla Koblyakova, a housing finance expert at Nottingham Trent University, said: “There are significant regional differences within all UK housing and mortgage markets. Variations in regional economic conditions, differences in mortgage lending conditions, private rental pricing, economic and political uncertainty and differences in lending practices all factor into different responses from regional housing markets.
“The housing market in Northern Ireland has historically shown high volatility in house prices. On average, it is characterized by higher loan-to-value ratios (LTVs) compared to the rest of the country. According to data from the Understanding Society Survey, the average LTV for buying a property in Northern Ireland is around 4.3 per cent higher compared to the rest of the UK.
“So even in a country like the UK where mortgage rates are set at a national level, there are still differences in regional mortgage pricing risk profiles. As well as different lending practices, this can lead to higher or lower LTVs when taking out a mortgage in different parts of the country. These differences by region can have a significant impact on house price movements.
“Regional differences should be a warning to the Government. Faster increases in house prices tend to lead to more rapid falls in house prices followed by more rapid falls in house prices. So any rapid increases in house prices in an area like Northern Ireland are likely to fall faster and more deeply than in areas with less growth.”
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