Fears for health of property market

Home
> Homefinder

Homefinder

House prices are continuing to drop

Wednesday, April 30, 2008

By Victoria O'Hara

Fears the decline in the Northern Ireland housing market would escalate were raised as new figures show UK house prices have fallen by 1% during the past 12 months. It is the first year-on-year fall since 1996.

The average home in the UK now costs £178,555, £1,759 less than 12 months ago.

The Nationwide stressed the drop needs to be seen in the context of the strong house price growth seen in recent years, with house prices soaring by 45.5% during the past five years.

Nationwide's chief economist Fionnuala Earley said: "April was another difficult month for the housing market.

"Falling levels of market activity meant that prices fell by 1.1% during the month and ended up 1% lower than this time last year.

"April's fall in prices continues the trend of the last six months and reflects the weakening sentiment in the market brought about by poor affordability and tighter financial market conditions."

But she said the current situation is different to conditions leading up to the 1990s house price crash.

The figures come just weeks after Nationwide statistics for the first quarter of 2008 showed the housing market in Northern Ireland had the weakest annual price growth in the UK.

House prices slowed most sharply in Northern Ireland but it still left average prices more than £15,000 higher than at the end of 2006.

"Of all the UK's countries, Northern Ireland showed the clearest change in house price trends," Ms Earley said.

"Prices in Northern Ireland are 3.4% lower than at this time last year."

She said while prices had fallen in the first quarter in Northern Ireland, they are still more than 50% higher than two years ago. The figures issued at the beginning of April for the first quarter of 2008 showed the average house price in Northern Ireland was £196,892, £197,403 in England, £151,499 in Wales and £149,834 in Scotland.

In the last five years, house prices in Northern Ireland increased by more than 160%. Ms Earley said the dramatic increase in house prices during 2006-7 has now come to an end.