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House price rise squeezes local private rental sector


Average local house prices are now £169,348

Average local house prices are now £169,348

Average local house prices are now £169,348

Applications for decent quality rental accommodation are at an unparalleled level because of the overall squeeze on housing, according to an expert.

Dr Michael McCord, who helps compile the house price and rental indices for Ulster University, added that there is also evidence of a “complete lack” of detached properties on the market right now.

He was speaking as the latest survey of house prices UK-wide by Halifax reported that double digit growth is continuing here.

Prices are rising at the fastest rate of 10% in the UK, bar Wales.

Average local house prices are now £169,348, according to the Halifax report.

This is in line with the recent number published by the Northern Ireland Statistics and Research Agency (Nisra).

But it is significantly less than the one reported by the UU house price index, which most recently put the overall house price average at £198,821.

This is largely to do with different methodology being used, said Dr McCord.

UU researchers, using data culled from various sources, including estate agents, are likely able more effectively to tap into what is happening on the ground and closer to real time, he added.

But all surveys agree that prices are rising at a fast rate due to high demand, lack of stock and “cheap liquidity”, or favourable mortgage lending driven by continuing low base interest rates.

“The private rental sector is being squeezed,” Dr McCord said.

“There are challenges. Affordability pressures are mounting. Applications for decent quality rentals is unparalleled. It is market fundamentals — demand and supply.”

The pandemic, lockdowns and their lifting, has propelled the entire market into a “strange, artificial setting”, he said..

Halifax managing director Russell Galley said there is greater uncertainty than has been the case for quite some time. He expects interest rates to rise to combat inflation.

“Leaving aside the direct impact of a possible resurgence in the pandemic for now, we would not expect the current level of house price growth to be sustained next year given that house price to income ratios are already historically high, and household budgets are only likely to come under greater pressure in the coming months,” Mr Galley said.

According to Halifax, buying a property in Wales has never been as expensive, with the average breaking the £200,000 barrier for the first time. In Scotland the average price rose 8.5% year-on-year to £191,140, also a record.