Newry and Antrim in Northern Ireland are the UK's top property hotspots with both recording a 46 per cent rise in prices over the past year. Average prices in Newry are up from £123,334 in 2005 Quarter 3 to £180,546 in 2006 Quarter 3. Average prices in Antrim are up from £110,320 to £161,177.
Towns in Northern Ireland dominate the ten towns that have seen the biggest house price rises during the last 12 months with seven towns in the list: Craigavon, Londonderry, Ballymena, Lisburn and Belfast in addition to Newry and Antrim. This is the first time that towns in Northern Ireland have featured so prominently amongst the top ten. The remaining three towns in the top 10 comprise two in Scotland – Kilmarnock in Ayrshire, Oban in Argyll and one in the North West – Nelson.
The rapid rise in house prices in Northern Ireland over the past year partly reflects the more favourable housing affordability position in the country compared to the rest of the UK. A strong labour market and high levels of immigration have also helped to boost demand. Many of the areas that have seen the biggest price rises are within commuting distance of Belfast but offer more affordable housing than in the capital. There has also been high demand for properties from second homebuyers and buy-to-let investors in the Republic of Ireland who have been attracted by the relatively low prices in Northern Ireland, which has contributed to rapid price growth.
There has been a sharp fall in the number of towns where the average price is below £100,000 in the past few years. Lochgelly in Fife is now the only one town – out of the 420 surveyed - with an average price under £100,000. This compares with more than a 100 towns with an average price below £100,000 just three years ago.
House prices increased in ten regions during the third quarter. The biggest price increases were in Northern Ireland (6.6 per cent), South West (1.5 per cent), South East (1.5 per cent) and the North (1.4 per cent).
There were modest falls in Yorkshire and the Humber and East Midlands (both -0.8 per cent), reflecting the increasing affordability difficulties for buyers as a result of the very rapid rise in house prices in these parts of the country over the past few years.
These small falls, however, need to be viewed in the context of a more than doubling in average house prices in both regions over the past five years. Indeed, occasional quarterly prices falls are a common feature of a slowing market with all the regions of England and Wales, except the North West, recording at least one quarterly decline in the past two years. The underlying trend, nonetheless, in all these regions has been of rising prices.
The nine English regions have experienced remarkably similar house price gains during the last 12 months with all regions experiencing rises of between 5.5 per cent and 8.5 per cent; the narrowest range recorded since the began in 1983. Over the past year, prices have risen most strongly in Northern Ireland (30.0 per cent) and Scotland (14.5 per cent). All other regions have recorded single digit house price inflation, ranging from 8.5 per cent in Greater London to 2.9 per cent in Wales.
Annual house price inflation in Greater London eased from 10.9 per cent in Q2 to 8.5 per cent in Q3, indicating that the boost to prices in the capital from this year's record high City bonuses has diminished.
Commenting on the housing market in the UK, Martin Ellis, chief economist, said: " Towns in Northern Ireland dominate the list of ten towns that have delivered the strongest house price rises in the UK over the past year. This partly reflects the more favourable housing affordability position in the country compared to the rest of the UK. Notably, all ten towns recording the strongest price rises over the past year had average house prices that were comfortably below the national average this time last year.
"The market is underpinned by sound fundamentals. A number of developments are nonetheless expected to constrain housing demand and moderate house price inflation over the coming months. Further substantial increases in utility bills and recent mortgage rate increases will put pressure on householders' finances, curbing housing demand."
