First timers 'hit' by price rises

Rising prices could make it harder for first time buyers

House prices in Northern Ireland have continued their growth into 2005, the latest figures have said, prompting fresh concerns for first time buyers.

The average price of a house has hit £122,661, according to the University of Ulster's House Price Index report.

It said there were concerns of affordability, with fewer houses in the "starter" band of £50,000 to £100,000.

The survey, using a sample of 2,037 transactions, said the House Price Index has risen 15.5% to 467.91.

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The authors of the index - Professor Alastair Adair, Professor Stanley McGreal and Louise Brown - said there were concerns about affordability for first time buyers.

"The growth in prices compared to the start of 2004 is at the high end of everyone's expectations and signifies that the local property market has been much more robust than anticipated," they said.

It is clear that between 2001 and 2004 the affordability gap has widened particularly for first time buyers Joe Frey Housing Executive

"An area of concern will be the falling proportion of houses that come within the £50,000 to £100,000 'starter' band, which raises issues around affordability."

In 2001, there were 18,000 first time buyer loans, but in 2004 this had fallen to 11,000.

The Bank of Ireland's head of research in Northern Ireland, economist Alan Bridle, said he believed prices would go on rising.

"The local economy will see steady growth again this year, interest rates are likely to remain stable, the buoyant investor market is off-setting lower numbers of first time buyers and there are savings for buyers as a result of the rise in the Stamp Duty threshold in the Budget," he said.

"Last year we estimate about 10% of houses here were exempt from Stamp Duty. Under the new rules this figure could rise to about 65% - and for individuals it means savings ranging from £600 to £1,200."

Locations

The Housing Executive's head of research, Joe Frey, said addressing the affordability issue was an important objective.

"From the Housing Executive's research it is clear that between 2001 and 2004 the affordability gap has widened particularly for first time buyers," he said.

"There is no doubt that five successive interest rate increases since November 2003 have taken their toll on purchasing power.

"The Housing Executive is encouraging statutory agencies - banks, building societies and developers must work together to tackle the problem."

In Belfast, the overall average price of £117,356 reflected an annual rate of growth of 11.7%. All sectors of the market showed growth.

The highest priced city location remains south Belfast with an average of £145,479. East Belfast, with an overall average price of £140,678, is the next highest priced location.

Price levels in west Belfast rose significantly to an average of £102,467, while north Belfast has the lowest price structure with an average overall house price of £85,184.

South Belfast remains the most expensive city area

In north Down, the average price of £134,737 represents an increase of 17.6% - evident across all property types. The best performing sectors were semi-detached houses up 23%, detached homes up 22% and semi-detached bungalows up 20%.

Lisburn saw slower rates of growth with an average of £131,018 representing a modest increase of 2.7%.

There were considerable variations in property types with terraced/townhouses up 27% over the year, semi-detached bungalows up 23% and semi-detached houses up 20%.

However, detached bungalows fell by 5.57% and there was a drop of nearly 3% in the average price of a detached house.

In the East Antrim market the average price of £105,083 has increased by nearly 15% over the year and by almost 4% over the previous quarter. All sectors of the market here, except apartments, showed an annual uplift.

In the north and north west the picture is one of high annual rates of increase.

In Antrim/Ballymena the overall average price of £126,162 is up by 23% compared to the same period last year with all sectors of the market performing strongly.

Surge

In Coleraine, Limavady and the North Coast the overall average price surged by almost a third over the year to £135,851 reflecting high rates of increases in all types of property.

Quarterly performance also showed strength with an increase in the average by more than 6%.

In Derry/Strabane the overall average price has again risen substantially to £107,945, up almost 21% on the same period a year ago.

In the west, the mid-Ulster market has increased to £130,083 representing an annual growth rate of 15.3%, very close to the Northern Ireland average, with a similar picture in the Enniskillen/Fermanagh/south Tyrone market where the annual increase was 15.5% to an average house price of £131,467.

In the south, Craigavon/Armagh recorded a fall in the average price of a house, both over the year and on the previous quarters.

The average price of £103,468 represents a fall of 3.6%. Most of the price reduction was due to a weaker first quarter performance with the market not sustaining the high price levels seen in the last quarter of 2004.

Mid & south Down showed a contrasting pattern with the overall average up by 16.5% to £128,509. While quarterly performance was slightly more variable over different house types, the overall average was up 2.7%.

Annual percentage increases by property type
Market sector	Annual change
Terraced house	22.39%
Semi-detached house	12.98%
Detached house	12.26%
Semi-detached bungalow	18.7%
Detached bungalow	22.72%
Apartment	6.06%
Source: University of Ulster Quarterly House Price Index

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Average house prices by region
Location	Average price Q1
Northern Ireland - All	£122,661
Belfast - All	£117,356
North Belfast	£85,184
South Belfast	£145,479
East Belfast	£140,678
West Belfast	£102,467
North Down	£134,737
Lisburn	£131,018
East Antrim	£105,083
Londonderry/Strabane	£107,945
Antrim/Ballymena	£126,162
Coleraine/Limavady/N Coast	£135,851
Mid Ulster	£128,861
Enniskillen/Fermanagh/S Tyrone	£131,467
Mid & South Down	£128,509
Craigavon/Armagh	£103,468
Source: University of Ulster Quarterly House Price Index

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