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Northern Ireland no longer UK's cheapest place to buy a house: Nationwide

By Jonny Bell

Published 29/06/2016

House prices across Northern Ireland have increased by 1.8%.
House prices across Northern Ireland have increased by 1.8%.

Northern Ireland is no longer the cheapest place to buy a home in the UK, according to the latest house price index from Nationwide.

The building society reported house price growth of between 3% and 6% across the UK in the past 12 months with a surge in the number of homes bought in March ahead of the introduction of stamp duty on second homes in May.

In the North of England house prices declined in the second quarter of 2016 resulting in the region replacing Northern Ireland as having the cheapest homes in the country.

House prices in Northern Ireland rose by 1.8% in the past year.

Average house prices across the UK were £204,238. For Northern Ireland the average was £128,562 and the North of England was £123,917.

Scotland follows after the North of England and Northern Ireland as the next cheapest region to live with prices north of the Scottish border at an average of £141,245.

Although London experienced a slowdown in growth, it remained the most expensive place to live, with prices at £472,384.

The index also shows that Northern Ireland prices are almost half (49%) of what they were in 2007, before the economic crash of 2008.

It is too early, the building society said, to determine the impact last week's EU referendum Leave result will have on the property market.

Robert Gardner, the Nationwide's chief economist, said: "Gauging the likely impact on house prices will be even more difficult.

“Ultimately conditions in the housing market will be determined by conditions in the wider economy, especially the labour market. It is too early to assess the impact of the referendum vote on the economy.

"However, it is encouraging that the labour market had remained robust in recent months, with solid employment growth and the unemployment rate declining to an eleven-year low in April.

"Borrowing costs also remained close to historic lows.

"Moreover, the lack of homes on the market – with estate agents continuing to report a record low number of properties on their books – will also provide underlying support for prices even if demand softens."

The economist said regional disparities continued to grow.

He added: “Regional house price trends also maintained the pattern prevailing in recent quarters, with southern areas of England recording the fastest rates of house price growth in Q2.

"The Outer Metropolitan region again had the strongest rate of annual price growth of 12.4% up from 12.2% in Q1. Despite a slowing in Q2, London was still the second strongest region with prices up 9.9% to a new all-time high, some 54% above pre-crisis levels (compared with 10% for overall UK house prices).

"The North of England was the only region to see house prices decline in Q2, and as a result replaced Northern Ireland as the UK’s least expensive region. Average prices in the North are currently 9% below their pre-crisis peak.

“It remains the case that the pace of house price growth tends to decline as you move from the south to the north of the country, even though prices in the south are already well above pre-crisis levels, while in Northern Ireland, Scotland, Wales and the North of England prices remain well below their 2007 highs."

He added: "Similarly, it is difficult to gauge how sentiment from overseas buyers will be impacted by increased economic uncertainty on the one hand and the sharp decline in sterling on the other (which, if sustained, reduces the cost of UK property in foreign currency terms)."

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