NI house prices amongst fastest growing in UK

House prices in Northern Ireland have been growing faster than anywhere else in the UK outside London and the Home Counties, according to business advisors PricewaterhouseCoopers (PwC).

According to the latest issue of PwC’s ‘UK Economic Outlook’, London house prices rose by 250% since 1995, followed by the southeast of England and East Anglia.

Next highest was Northern Ireland, where house prices have doubled since 1995 and are still rising. Since the beginning of 1995, Northern Ireland house prices have risen substantially ahead of the UK average.

However, PwC says that while London property is overvalued by as much as 30%, there is no evidence that Ulster property prices face a slump if interest rates rise in the near future.

For the first time since 1982, Northern Ireland’s ratio of house prices to earnings is above the UK long-term average. The province’s average house prices are now almost four times average incomes and close to the ratio of the highest regions of London, the southeast and southwest of England. Northern Ireland house prices have been further boosted by local factors, including increased political stability, urban regeneration and property speculation.

However, despite the doubling of property prices in the past seven years, average house prices in the Province remain well below the UK average.

Commenting on the findings, PwC’s chief economist, Philip McDonagh, said: “Northern Ireland house prices are rising rapidly, with the ratio of house prices to earnings at levels not seen since the 1970s. Recent levels of house price inflation in London and the southeast cannot be sustained, but there is no evidence that local prices are overvalued to the same extent. Over time, UK house price increases should moderate but Northern Ireland prices have accelerated steadily for nearly a decade and may not peak for some time yet.”

The report also shows that Northern Ireland, the Midlands and Scotland continue to experience a twin-speed economy, with relatively buoyant retail and property spending but continued anxiety amongst manufacturing companies.

Overall, most of the 12 UK regions continue to reflect depressed manufacturing and export activity with only modest recovery and growth thus far, amongst business services in most regions.

(MB)