Thu, 06 Jul 06
House prices in Northern Ireland have more than tripled in the past 10 years and are creating acute affordability problems for many first-time buyers according to a new report by the Council of Mortgage Lenders.
Average house prices in the province stood at £42,619 in 1995 and have risen to £153,457 in the first quarter of 2006.
The research also reveals that homes in Northern Ireland were worth on average 75% of those in the rest of the UK. This figure was down from 83% in 2001, but it is more than a third higher than 1990 when homes were worth 49% of the UK average.
Northern Ireland has also witnessed strong growth in house price inflation in recent years. In 2005, house price inflation was 22%, and by the first quarter of this year had increased to 30% - higher than any other region in the UK.
But the research warns that increases in house prices and house price inflation are creating affordability problems in many areas of the province, and this is pricing first-time buyers out of the property market. Between 2000 and 2005 there was a 24% decline in the number of first-time buyers in Northern Ireland, compared to just 7% in the UK as a whole.
Commenting on the research, CML Northern Ireland chairman Derek Wilson said: "Affordability is a hot topic in the Northern Ireland housing market at the moment. Although the province is one of the more affordable parts of the UK, strong house price growth has outstripped wage increases, and this is curtailing the power of potential home-owners to buy a property."
"Declining numbers of first-time buyers present mortgage lenders and other stakeholders with a big challenge. Lenders already have a range of products available to help struggling first-time buyers, but it is vital that the debate surrounding affordability is addressed to help even more people afford their own home."
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