Lockdown might inadvertently have helped move Northern Ireland towards a more balanced market in home prices

House prices are one of the most important economic indicators in any property owning democracy such as the United Kingdom.

Ideally such a society will have high levels of home ownership because it boosts the number of people who feel they have a full stake in communities.

But if property prices are too low, homeowners feel less wealthy and can be less confident about spending.

If property prices get too high, then the number of people who can afford their own home drops.

For decades, the latter scenario has been emerging in parts of England around London. Such a decline in home ownership is de-stabilising because it can alienate younger generations and push them towards radical politics.

Northern Ireland had a disastrous housing boom in 2005, 2006 and 2007. It then had one of the biggest property price crashes in economic history, with prices more than halving.

Getting out of such a collapse is not easy. If prices rise too fast from the trough, the pattern of boom and bust continues. If they stay low, then many people are trapped in the despair of negative equity (a house worth less than the home loan).

NI was fortunate in a way. The recovery from the 2012 lowest point after the crash has been slow and gradual.

Home owners have seen their asset return closer to the value it once had. Younger generations can still afford to buy.

It is intriguing to learn from University of Ulster that there was a rise in prices in the year to late 2020, despite Covid.

There is said to be particular demand for semi detached and new build homes, ie not for flats.

Few people would want to go through another lockdown in fine weather without a garden.

This trend in property prices is perhaps a good one. Increased working from home could mean people need to live in cities less, and so deflate high prices there, while the depressed rural housing market revives.

This could lead to a healthier population balance between town and country.

——— ———

A message from the Editor:

Thank you for reading this story on our website. While I have your attention, I also have an important request to make of you.

With the coronavirus lockdown having a major impact on many of our advertisers — and consequently the revenue we receive — we are more reliant than ever on you taking out a digital subscription.

Subscribe to newsletter.co.uk and enjoy unlimited access to the best Northern Ireland and UK news and information online and on our app. With a digital subscription, you can read more than 5 articles, see fewer ads, enjoy faster load times, and get access to exclusive newsletters and content. Visit https://www.newsletter.co.uk/subscriptions now to sign up.

Our journalism costs money and we rely on advertising, print and digital revenues to help to support them. By supporting us, we are able to support you in providing trusted, fact-checked content for this website.

Alistair Bushe

Editor