House prices set to increase by four per cent in 2015

Mortgage availability and the supply of new homes remain critical to the health of the market in 2015 says theRICS
Mortgage availability and the supply of new homes remain critical to the health of the market in 2015 says theRICS

Northern Ireland house prices are set to rise beyond the UK average and outperform most other UK regions, according to the latest forecast from the Royal Institute of Chartered Surveyors (RICS).

While prices in the UK will see an average increase of three percent, bolstered by recent changes to Stamp Duty, continuing demand and lack of supply of property, the province will see a four per cent hike the RICS says.

The forecast looks ahead to the next 12 months, across all parts of the housing market, from house prices, sales, rents and housing starts and repossession levels.

At four per cent, Northern Ireland’s anticipated growth rate will be above areas including London, Wales and the East Midlands.

“2014 saw stronger house price growth in Northern Ireland than RICS anticipated, largely due to a stronger economic recovery than expected,” said RICS Northern Ireland residential spokesman, Samuel Dickey.

“In the local market, there is still an issue with supply, whilst buyer demand remains strong.

“This is creating the conditions for continuing price growth. However, with public spending cuts likely to act as a drag on the economy, we expect price growth to be more modest in 2015 than it has proved to be in 2014.”

In terms of sales activity, he said that, whilst sales remained at very low levels relative to the pre-crisis peak, they have been increasing and that is expected to continue into 2015.

“The Stamp Duty reforms announced in the Autumn Statement, which will benefit the majority of homebuyers, will help,” Mr Dickey added.

Looking at the UK overall, RICS chief economist Simon Rubinsohn said the position was not clear cut.

“2014 was a significant year for the property market as a more broadly based recovery took hold.

“Help to Buy funding helped to support the turnaround alongside the more positive trend in the wider economy.

“Although the Mortgage Market Review may now be resulting in mortgage lenders being a little more discriminating in the supply of finance, the recently announced reform of stamp duty, is likely to provide a tonic for the market across many parts of the country, particularly for first-time buyers.

“That said, the bigger affordability issue is not going to go away highlighting just how important it is to speed up the supply pipeline of new homes over the coming years.”