House prices rise faster in NI than in London

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House prices increased at their slowest annual pace in two years in June, with property values in Northern Ireland rising at a faster rate than those in London, Nationwide Building Society has reported.

Values across the UK increased by 3.3% in the 12 months to June, marking the weakest annual growth since June 2013.

On a month-on-month basis, prices fell by 0.2%, reversing a 0.2% increase in May. The average UK house price is now £195,055.

Northern Ireland, where prices fell sharply in the wake of the economic downturn, overtook London to record the strongest growth on a regional basis, at 8%.

London came in second place, with a year-on-year increase of 7.3%, taking the average property price to £429,711.

Wales and Scotland were the only regions to see prices fall year-on-year, recording declines of 0.8% and 1% respectively.

Despite the acceleration of house price growth in Northern Ireland, average values there are still around 45% below their 2007 peak levels, Nationwide said. The average house price in Northern Ireland is £126,525.

Looking at towns and cities across the UK, Nationwide said Reading was the best-performing place, with prices having surged by 13% over the last year.

This was followed by Oxford, where values recorded a 12% increase. Coventry, Brighton and Bristol rounded out the top five “best performing” places, all recording growth of 10%.

Looking at the towns and cities which have seen the weakest growth, Sunderland topped the list with a 4% annual fall, followed by Belfast, where prices fell by 3%, and Nottingham, down 2%. Plymouth and Glasgow were also on the worst-performing list, recording a 0% annual change.

Robert Gardner, Nationwide’s chief economist, said that while house price growth is continuing to out-pace earnings, the gap is closing.

This has been helped by a pick-up in annual wage growth, which moved up to 2.7% in the three months to April, from 1.9% at the start of the year, he said.

A year ago, house prices across the UK were surging at an annual rate of 11.8%, compared with 3.3% now.

Mr Gardner said: “The slowdown in house price growth is not confined to, nor does it appear to be driven primarily by, developments in London.

“Eleven of the 13 UK regions saw a slowdown in the annual rate of growth in (the second quarter of 2015).

“Most parts of the country continued to see annual house price gains - the exceptions were Wales and Scotland, which recorded small declines.”

The average house price across Scotland is now £140,512 and the typical value across Wales is £144,701.

Mr Gardner said that with the supply of homes available generally still tight, looking ahead, the stock is likely to be used increasingly intensively until building activity catches up.

He said: “There are signs that this has been occurring, with the number of vacant properties trending down since 2008.”