North witnesses biggest fall in house prices across UK in 12 months to July

NORTHERN IRELAND witnessed the biggest fall in house prices across the UK last year with an average of 10 per cent being wiped off the value of homes in the North.

New figures from the UK's Department of Communities and Local Government show the average house in the UK lost 0.3 per cent of its value in the 12 months to July. However, the deepening crisis in the North's property sector pushed the decline in house price growth in the North in to negative double digits.

Annual average house prices fell in England by 0.3 per cent and in Wales by 0.8 per cent while in Northern Ireland they fell by 10.3 per cent in the 12-month period under review.

Only Scotland's property sector appears to have escaped the combination of an economic slowdown and a credit crunch. It produced a respectable 3.6 per cent growth in house prices over the past year.

The Government's official housing statistics differ from those produced by large banks such as the Halifax and Nationwide because they use different methodologies.

Banks tend to calculate house prices according to the rate of mortgage approvals, but the government figures are based on actual completions - this means that the government statistics do not reflect the current picture in the housing market.

Large lenders such as Halifax and Nationwide have warned that there has been a much steeper fall in house prices than is being suggested in the government report.

According to the latest figures the average house price in July 2008 now stands at £221,447 (€279,569) in Northern Ireland, £224,207 in England, £163,202 in Wales and £167,220 in Scotland.

The gloomy housing statistics were unveiled as an American property investment expert told key figures from the North's academic, property and public sectors that the collapse of Lehman Brothers proved a high price had to be paid for unwise risk-taking.

Speaking in Belfast last night Dr Stephen Roulac, a visiting professor at the University of Ulster, said there would be no quick recovery from the credit crunch.

"The problem facing the larger financial economic system is that consumers need financing to buy and financing is going to be less than readily available," he said.