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Northern Ireland house prices soar by 10.5%, double rate of London rises

Published 14/07/2015

Average house prices in Northern Ireland, property values are still around 45% below their 2007 levels.
Average house prices in Northern Ireland, property values are still around 45% below their 2007 levels.

Property price growth accelerated across the UK in May, with values in Northern Ireland increasing at more than double the pace of growth in London over the last year, official figures show.

UK property values increased by 5.7% in the year to May, up from 5.5% in April, the Office for National Statistics (ONS) said.

The latest jump took the average property price across the country to £274,000 - equalling a cash peak seen in August last year. House prices are now 13.3% higher than in January 2008, before the financial downturn set in, the ONS said.

On a month-on-month basis, values increased 0.9% across the UK in May, following a 1.4% dip in April.

Across the regions, prices in Northern Ireland have seen the strongest upswing over the last year, recording a 10.5% increase. Values in London have pushed up at less than half this rate, by 4.7%.

Property prices in Northern Ireland fell particularly sharply in the wake of the downturn, and still have some way to go to reach the levels they were at before the financial crisis, while prices in London are at record levels.

The average price in Northern Ireland is £152,000, which is 43% below the 2007 peak. The typical price in London is £503,000 - 40% higher than the pre-downturn peak.

In Scotland, prices have increased by 2.9% over the last year, taking the average value to £193,000. Prices in Scotland are 6.6% below a record level seen in March.

In Wales, prices have increased by 2.5% year-on-year, pushing the average value to £170,000. The index for Wales is 2.4% below a record level set in January.

The ONS figures also show that a typical first-time buyer faces paying 5.1% more for a property than they did a year ago. The average price paid for a starter home in May was £211,000.

Housing market experts have said that ultra-low mortgage rates and the improving economy are helping to support demand, while a lack of supply of homes coming on to the market is adding to an upward pressure on house prices.

Roger Harding, director of communications, policy and campaigns at Shelter, said: "Whilst it's good to see the Government recognise the need to build more homes, they're only going to solve our housing crisis with reforms that build homes that people on lower incomes can actually afford."

Howard Archer, chief UK and European economist at IHS Global Insight, said: "We currently expect house prices to rise by 6% in 2015 and there is an upside risk to this forecast coming from the current lack of properties coming on to the market. We currently see house prices rising by around 5% in 2016.

"There are increasing signs that housing market activity is now on the up; and we suspect that housing market activity will continue to improve amid generally supportive fundamentals and reduced uncertainty following the decisive general election result."

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