House prices in Northern Ireland have seen annual growth for the first time in more than five years according to official figures, in further signs that the market is turning a corner.
Northern Ireland prices recorded a 1.9% year-on-year rise in May to reach £134,000 on average, marking the first upturn since February 2008, the Office for National Statistics (ONS) said.
Across the UK, property prices rose by 2.9% year on year in May to reach £239,000 typically, showing the strongest annual growth seen so far this year. Values increased by 0.3% on a month-on-month basis, edging down slightly from the previous month’s rise.
House prices in Northern Ireland have seen some sharp year-on-year falls of around 10% since the economic downturn, which analysts have put down to the market “normalising” after a period of strong growth.
The about-turn seen in May follows annual decreases of 2% in the year to March and 0.8% in the year to April in Northern Ireland.
The latest figures also showed that house prices in England recorded a 3.1% year-on-year increase to reach £248,000 typically. The pace of annual growth in Scotland and Wales did not match that seen in Northern Ireland.
Wales recorded a 0.6% annual jump, pushing average prices to £157,000, while Scotland saw a 0.8% rise, taking property values to around £180,000.
Prices were up year on year across all regions of England. London prices rose fastest year on year at a rate of 6.6%, while the East Midlands saw the slowest growth at 0.6%.
The figures follow a stream of reports pointing to a housing market revival, with lenders, estate agents and property websites all reporting activity lifting this year.
Government initiatives to kick-start the market such as its Funding for Lending, NewBuy and Help to Buy schemes have been highlighted as giving the market a boost, resulting in better access to mortgages and more first-time buyers making a jump on to the property ladder.
The ONS figures were released as property website Zoopla reported that four-fifths (80%) of home owners believe property prices will rise in their area the next six months, which is the strongest sentiment it has recorded in three years.
The average rise that the 5,800 home owners are expecting is also at a three-year high at 4.8%. The biggest confidence boost among home owners was found in the West Midlands, where 78% of home owners now believe house prices will climb in their region over the next six months compared with 63% three months ago.
Londoners remain the most confident, with 93% of home owners in the capital expecting property values to rise in the next six months. Those in Wales were the most downbeat about their local property market, with 13% predicting a fall in property values over the second half of the year.
Zoopla spokesman Lawrence Hall said: “The trials and tribulations of the financial crisis drained confidence out of the market, but it is making a strong comeback.
“With mortgage availability improving considerably in the last few months, the first-time buyer market is moving again and revving the engine of the whole housing market. And the improvement in confidence isn’t limited to just London and the South East, it’s sweeping across the whole of the UK.”