North's house prices slowing down

There has been another slow-down in the rate of house price inflation in the North, according to the latest survey published today.

The Royal Institution of Chartered Surveyors (RICS) and Ulster Bank study said the rate of price rise eased back in July for the fourth month running.

They predicted the trend was likely to continue to the end of the year – but said there was little chance of a serious decline in values.

Just to confuse home owners, the figures were released the day after the British government said the rise in the North's house prices had been actually accelerating up to the end of June.

But the RICS said 37% of its members reported a rise in prices of between 0% and 2% in July, with another 23% recording inflation at over 2%.

A third of members questioned said prices had been static and 7% said the had fallen back by as much as 8%.

Tom McClelland, RICS Northern Ireland residential property spokesman, said: “Although there is probably some element of seasonality at play with regard to July data, we have seen a clear trend of slowing house price inflation over the past four months and this is almost certain to continue during the rest of the year.”

He added: “Whilst another interest rate rise could potentially lead to no house price growth for the foreseeable future, the huge number of first-time buyers poised to capitalise on the fall-off in investor activity, combined with continuing strong local economic conditions, will guard against any significant house price decline.”

The Ulster Bank head of mortgages Derek Wilson predicted a substantial increase in buying by first-time purchasers as investors sold up to cash in on the huge rises their property had made in recent years.

Mr Wilson said: “Whilst conditions are still difficult for first-time buyers, the fall-off in investor demand during recent months and the increase in supply to the market due to investors cashing in on the huge capital growth they’ve enjoyed in the past two years mean there is now greater choice for first-time buyers and less competition for the purchase of properties in their sector of the market.”

As a result he said he anticipated a “significant pick-up in first-time buyer activity” in the coming months – which should take up the slack resulting from declining investor demand.

Mr McClelland said despite the moderation of house price growth, housing affordability was still a major concern and the RICS was looking forward to working with Executive ministers, departments and agencies on the issue.