House prices continue to fall in North as UK recovers

HOMEOWNERS IN Northern Ireland continue to see the value of their property drop faster than in any other part of the UK, according to a key house price survey.

The Nationwide Building Society’s second-quarter survey shows a significant improvement in house-price trends across most UK regions with the exception of Northern Ireland.

The Nationwide said, as a whole, UK house prices rose 1.1 per cent between the first and second quarter in 2009.

In contrast to this finding, house prices in Northern Ireland continued to fall by 4.7 per cent over the same period.

Average house prices have declined by 26 per cent across Northern Ireland over the last 12 months.

The biggest drop in property values has taken place in Belfast where prices have declined on average by 29 per cent.

According to the Nationwide’s latest survey, the average house in the North now has a price tag of about £135,862 (€159,421).

In the UK the average value of a house has fallen over the year by 9.3 per cent to £156,442.

Martin Gahbauer, Nationwide’s chief economist, said Northern Ireland had recorded the most rapid fall in house prices of any UK region.

But Mr Gahbauer said prices were falling at a slower rate than this time last year.

“The ongoing relative weakness of house prices in Northern Ireland is mainly due to the fact that prices overshot significantly more on the way up than in any other UK region.

“In 2006-07, house prices [in the North] rose by a staggering 79 per cent, compared to 17 per cent for the UK as a whole,” Mr Gahbauer added.

He said that, for a short time, the North was one of the most expensive regions in the UK in which to buy property.

According to the Nationwide survey, house prices increased in Northern Ireland by up to nine times earnings, compared to six times earnings across the UK as a whole.

Mr Gahbauer said: “It therefore comes as no surprise that Northern Ireland should be seeing a particularly sharp adjustment as a result of the financial crisis and recession.”