House prices rise in North but lack of supply remains a concern

House prices rose in the first month of the year in the North but there were more potential buyers than sellers in the market, latest research shows as “mortgage accessibility” becomes a growing issue for first time buyers.

Agreed sales, buyer inquiries and instructions to sell all increased last month in Northern Ireland according to the latest RICS (Royal Institution of Chartered Surveyors) and Ulster Bank Residential Market Survey.

Samuel Dickey, RICS spokesman said the North currently appears to have a “more positive” housing market than some UK regions.

“Surveyors are relatively positive about the outlook, but there are a number of factors that could influence these outcomes including a rise in interest rates, a shortage of supply and economic wider conditions,” he said.

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The latest survey published on Thursday also showed there are fresh industry concerns that the rising cost of building materials will lead to higher prices on new build properties in the North.

Overall according to the RICS surveyors are generally positive that property prices will continue to move upwards and not fall back.

Mark Graham, chief executive of the not-for-profit Co-Ownership Housing Association, said while this may be good news for sellers it is not helpful for anyone trying to get on the local property market.

He said the current lack of housing supply in the North exposes “a legacy of underbuilding for over a decade”.

According to the latest Northern Ireland Housing Bulletin also released this week the total number of new dwelling starts for July - September 2017 was 1,723 - a year on year drop of 14.9 per cent. The bulletin also highlighted that the average property price at the time was £158,300

Mr Graham said: “The reality is that we are still not building anywhere near enough homes to meet demand. It is estimated that we need to be building something in the region of an additional 2,000 homes per annum in Northern Ireland, particularly in today’s market when the buyers’ preference is increasingly for new-build properties.

“On a daily basis we see the challenges faced by first-time buyers with low incomes, higher living costs and the need for large deposits all of which impact on mortgage accessibility,” Mr Graham added.