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Those who rent got no relief during decade of lower costs


The hike in interest rates is certainly important, symbolically at least, with the Bank rate moving above the emergency level introduced straight after the financial crisis for the first time.

However, for Northern Ireland households the impact is perhaps less than the attention that the move has attracted might suggest.

Most mortgage holders now have fixed rate deals rather than variable.

So, many existing mortgage holders won't therefore be directly impacted.

And the reality is that today most under-40s here don't actually even have a mortgage, as they are renters rather than homeowners. Therefore the cost of renting is of more relevance to them than the cost of borrowing from the banks.

Those people who had a mortgage before the financial crisis and still do are paying much less than they did previously.

However, for those renting homes, the cost of housing has gone only one way - up.

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Unlike homeowners, private sector renters didn't benefit from the Bank of England's emergency interest rate cuts (though their landlords did).

The annual cost of the average rent in Northern Ireland has increased by almost 11%, or £696, between 2013-2017, or up 13%/£924 for those renters in Belfast, and the ratio of median rental value to median incomes in Belfast is now a hefty 44.5%, and almost 37% in Derry and Strabane.

  • Richard Ramsey is chief economist at Ulster Bank