Slight slowdown in housing boom in North - Study

The North’s rocketing house price rises are finally showing signs of slowing down, a new study revealed today.

And even though growth rates are still the highest in the UK, experts predicted some of the investors fuelling the boom could be set to quit the local market.

In a poll of chartered surveyors 98% reported growth during April, but with the rate down from March’s astonishing levels.

Two-thirds of those questioned revealed rises of at least 5%, down from the 75% who returned that a month earlier.

Growth rates of 8% was just half as common this time, according to the Royal Institution of Chartered Surveyors/Ulster Bank housing study.

Tom McClelland, RICS’s Northern Ireland residential property spokesman, said the market was softening despite continued price rises.

“Last month’s rises were robust, indicating that confidence in the outlook for the market amongst buyers remains quite healthy, though with the prospect of May’s interest rate rise looming, it was inevitable that growth in April would not match the huge surge in prices that the survey reported in March,” he said.

“In the current interest rate environment and with the potential for one more hike to come it is likely that at least some investors will leave the market over the coming months, helping address supply issues and taking some more of the steam out of the residential property sector.”

Ulster Bank’s Head of Mortgages, Derek Wilson, pointed to the restoration of devolution to Stormont as a sign of continued strength.

However, he added that those seeking swift profits were already looking to other regions.

Mr Wilson said: “Confidence bred by political progress will certainly influence the market in the coming months in conjunction with the ongoing growth - albeit at a slowing rate – of the local private sector economy.

“However, as Northern Ireland house prices rise above many other UK regions, local housing is now less attractive as an investment and we are seeing places like Liverpool become increasingly appealing to buy-to-let investors.

“Combined with the likely prospect of another interest rate rise to come will, this will mean that the huge growth seen in the last two surveys may well give way to more modest price rises.”