Nationwide: Northern Ireland only region in UK where house prices are higher than a year ago
Pavilion Real Estate in Cookstown
3rd July 2023
Northern Ireland is the only region in the UK where house prices are higher than they were a year ago, new analysis from Nationwide suggests.
The building society put the average house price in the north at £182,740 in the second quarter of 2023.
That was 0.7 per cent higher than the same quarter in 2022.
It left Northern Ireland as the outlier among the 13 regions analysed in the report, where house prices all decreased over the year.
Nationwide said on average, house prices in the UK were 3.1 per cent down compared to the second quarter of last year.
The building society uses a different methodology from the official government endorsed house price index for the north, produced by Land & Property Services (LPS) and the Northern Ireland Statistics & Research Agency (Nisra).
The latest quarterly LPS index, published last month, concluded that house prices in the north fell in both the final quarter of 2022 and the first quarter of 2023.
Bank needed to make ‘strong move' after inflation report, says governor. House prices in Northern Ireland fall for a second quarter running says index
NI housing market 'cooling off' as home-buying falls by almost a third. It left the average price of a residential property here at £172,005 in the first quarter.
The official housing market data for the second quarter of 2023 won't be published until the middle of August.
Nationwide’s analysis does suggest the housing market is nonetheless cooling here. The annual change in house prices recorded for the first quarter of the year was 1.3 per cent.
The building society has also forecast that the sharp rise in interest rates will increasingly impact the housing market in the coming months.
Robert Gardner, Nationwide's chief economist said mortgage applications have not yet declined, with consumer sentiment still relatively strong.
But he said: "The sharp increase in borrowing costs is likely to exert a significant drag on housing market activity in the near term."
A 10 per cent deposit on a typical first-time buyer home is equal to around 55 per cent of gross annual income, Nationwide said.
It added that, while this is down from the highs of 59 per cent prevailing in late 2022, it is marginally above the levels prevailing before the financial crisis struck in 2007/8.
Mr Gardner added: "Moreover, despite the higher interest rates available to savers, the sharp rise in rents, together with continued high rates of inflation more generally is continuing to make it difficult for many prospective buyers to save for a deposit."
He said: "A combination of healthy rates of income growth and modest price declines should improve affordability over time, especially if mortgage rates moderate."
Mr Gardner said that for people coming off two-year fixed-rate mortgage deals, a new two-year deal could equate to an increase of £385 per month for a typical borrower.
Those coming off five-year deals face an increase equating to around £315 per month for a typical mortgage borrower, he said.
He said lenders will work with borrowers to provide assistance wherever possible.