Belfast Telegraph

Belfast house prices rising 'as fast as London'

Northern Ireland property prices increased by 10.2% in the last year

By Claire Cromie

House prices have increased in Belfast at the same rate as London - with a massive 21% growth in the last year, says Nationwide.

The average property in Belfast is now worth £188,240, according to the building society's House Price Index.

While prices have not risen as sharply across the rest of Northern Ireland, the province still saw a 10.2% increase in the last year.

House prices here fell particularly sharply as the financial crisis set in in 2008. Despite climbing strongly to £119,782 over the last year, they are still nearly 50% below their 2007 market peak - and miles off the UK average of £188,810.

Belfast remains the most expensive area, with the west of Northern Ireland the least expensive.

The north east had the weakest annual price change.

Across the UK, house prices fell back from a record high in September with the first month-on-month decrease in more than a year.

The monthly price decrease follows 16 months in a row of increases and ends the run of property prices across the country hitting fresh highs over the summer.

Robert Gardner, Nationwide's chief economist, said "the outlook remains uncertain" in terms of the direction of the UK housing market generally for the rest of the year.

He said price growth may soften further and there have been "tentative signs" from estate agents that demand from potential buyers may be starting to cool.

But, on the other hand, low interest rates, which are keeping borrowing cheap, and the strong labour market "suggest that underlying demand is likely to remain robust", he said.

Typical UK house prices surpassed their 2007 peak in cash terms in May this year and up until this month they had been reaching new records ever since.

Year-on-year house price growth slowed to 9.4% in September, from 11% in August. Year-on-year price growth had previously been hitting double digits since April, according to the building society's study.

Despite the slowing pace of house price growth, every region across the UK recorded year-on-year house price gains, from 21% in London to 4.3% in the north of England.

At £401,072 on average, London house prices reached a new record high in September and now stand at 31% above their 2007 pre-financial crisis peak in the capital.

Across major towns and cities, St Albans in Hertfordshire was named as the top performer. Prices in St Albans have leapt by 24% over the last year to reach £479,497 typically, meaning that values there have increased at a faster annual pace than those typically seen across London.

Nationwide predicted that the annual pace of London house price increases will soften in the coming months, following the strong rises already seen.

Within London, it said Camden has seen values typically surge by a "remarkable" 42% annually to reach £884,103.

Other London boroughs which have seen particularly fierce price growth over the last year include Lewisham, Tower Hamlets and Waltham Forest, which have all recorded a 30% increase in prices.

Lambeth has recorded 33% annual price growth, while in Haringey properties have piled 31% on to their value over the last year.

London and southern England are continuing to drive house price growth with an annual price increase of 14.4% recorded in London's surrounding commuter belt areas, a 13.2% annual price increase recorded in south east England and 11.0% year-on-year growth in values recorded in East Anglia. The South West of England has seen property values push up by 9.2% annually.

Property values in Scotland have seen a 5.2% increase over the last year, taking the average price there to £142,288. Prices in Wales have risen by 5.0% annually to reach £144,096 typically.

On a quarterly basis, prices across the UK lifted by 1.5% in the three months to September compared with the previous three months, which is still a "relatively strong" increase, Mr Gardner said. Quarterly changes tend to be a good indication of the underlying direction of the market.

In the North West of England, prices have pushed up by 6.1% annually, while those in Yorkshire and Humberside have seen a 5.5% rise. In the West Midlands and East Midlands, prices have increased by 8.6% and 7.8% respectively.

Newcastle was named as the worst-performing city, with a 4% annual price increase taking average values there to £182,506. It was followed by Coventry, Leicester, Cardiff and Manchester on the worst-performing list. Values in Coventry have edged up by 5% year on year, while in Leicester they have increased by 6% and in both Cardiff and Manchester they have lifted by 7%.

Andrew Montlake, director at mortgage broker Coreco, said it is "pleasing" to see that the pace of house price growth is slowing, as this points to the market being more sustainable.

He said: "Although mortgages continue to be available at exceptionally low rates, issues around affordability and the inevitability of future interest rate rises have made borrowers more cautious about paying over the odds for property."

Stricter lending rules also came into force in April under the Mortgage Market Review (MMR), which mean that mortgage applicants have to provide more evidence to lenders to prove that they can truly afford their mortgage, both now and when interest rates start to increase.

Bank of England figures released yesterday show that 64,212 mortgages approvals for house purchase were made in August, compared with a higher average of 65,738 seen over the previous six months.

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