Northern Ireland is lucky to be outside GB’s housing boom

Morning View
Morning View

House prices continue to rise sharply upwards in England.

Property prices across the UK have risen 36% in five years, which is five times the 7% increase in average earnings.

The increase relates to the whole of the UK, but is overwhelmingly concentrated in England – Wales has recorded much slower growth and Scotland and Northern Ireland are still below their pre-economic recession peak (the Province markedly so).

The data comes from a Resolution Foundation analysis of Office for National Statistics (ONS) figures.

House prices rose 10% over the last year in England to £307,000, and 13% in London to reach £552,000.

Northern Ireland, Wales and Scotland are fortunate to be outside of the orbit of these soaring prices.

The Province had one of the worst house price booms in British economic history, and all it did was bring misery – young people who had over-borrowed after being told by the older generation that “you can’t go wrong with property” were left with ruinous debts. Some people and businessmen and builders went bust.

The boom was a reflection of a wider European and American house price boom that almost brought down the banking system when it burst.

London and the SouthEast of England, however, only had a mild downturn before prices started rising again.

Part of the problem is immigration, which has greatly increased pressure on the housing stock there.

The situation is explosive. A seething generation of young people is shut out of ownership and paying prohibitive rents.

In Northern Ireland we had seen modest but persistent rises from the trough after the crash, around 2011. This has given welcome relief to people in negative equity and has got the housing market and construction industry moving.

Let us hope that rises remain at a sensible pace, and we do not return to the disastrous days of housing boom and bust.