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Northern Ireland house prices climb 7.8%, but Brexit 'chills market'

By Margaret Canning

Published 19/10/2016

Northern Ireland house price increased by 7.8% to reach £123,000 in the year to August
Northern Ireland house price increased by 7.8% to reach £123,000 in the year to August

The average Northern Ireland house price increased by 7.8% to reach £123,000 in the year to August, according to a report. But despite the considerable increase, the province remains the lowest-price UK region in which to buy a home, with one estate agent claiming Brexit was having a chilling effect on the market.

The Office for National Statistics (ONS) said the average UK house price was up 8.4%, to reach £219,000 - also up 1.3% on the month before.

The main contribution was from England, where prices soared 9.2% to reach an average of £236,000. In Wales and Scotland respectively, prices rose by 2.7% and 4.3% - both reaching £145,000 - leaving Northern Ireland with the strongest growth of the three devolved nations, but still the lowest prices overall.

Estate agent Richard McCulloch, of McCulloch Estate Agents, which has offices in Magherafelt and Belfast, said the ONS figures reflected steady growth over most of the last year.

But he added that potential buyers were feeling cautious. "The ONS findings do make sense, but that's really only up until the Brexit announcement," Mr McCulloch said. "Brexit has had a really chilling effect on the market, on growth and transactions, and anecdotally some estate agents are saying that it's having as bad as an effect as the banking crisis.

"As well as that, the changes to stamp duty on buy-to-lets have also stopped activity at the bottom of the market."

He said the decision to increase stamp duty on second homes by 3% - announced by former Chancellor George Osborne this year - had not had its desired effect of making more room for first-time buyers.

"What it has achieved is to drive away the investors in that lower end of £50,000 to £60,000," he added. "I think it was expected there would then be a rush of first-time buyers, but that just hasn't happened."

But he said caution among would-be buyers resulting from Brexit did have "a silver lining".

"It means that overall prices are still affordable, and I would say that the ONS average of £123,000 would now buy you a typical three-bed semi," Mr McCulloch said. "So the result is that prices are at a sensible level.

"I think if they remain at this level because of these external factors, it's still a good time to buy your home."

In England, London continues to be the area with the highest average house price, at £489,000, while the lowest average price in England continues to be in the north east at £127,000 - still above the Northern Ireland average.

The figures also showed that a first-time buyer paid 8.2% more for a property in August than they would have done typically a year earlier.

The average price paid for a home by a first-time buyer is now around £184,000.

Meanwhile, separate figures from mortgage information company Equifax show a 0.7% increase in mortgages concluded by brokers in Northern Ireland during August - the weakest growth of any UK region.

Growth in other parts of the UK ranged from 1.9% in Scotland to 12.7% in the north west. UK-wide, mortgage sales through intermediaries were up by £1.2bn. Residential and buy-to-let sales for the month totalled £15.1bn.

Belfast Telegraph

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