NI house prices return to 2005 levels

Housing charity Shelter said the average house price for first-time buyers was now £12,000 more than this time last year and called on the Government to build more affordable homes.

House prices are now 14.6% higher than their pre-crisis peak in 2008.

House prices in England increased by 6.1pc over the 12 months to June, taking the cost of buying a new home to £290,000.

Property prices in Northern Ireland fell particularly sharply in the wake of the downturn, and are still catching up with those seen in other regions.

“The latter is striking because oil is 50 per cent cheaper than a year ago yet airfares are up”. The new tiered tax rate on residential property makes it more expensive to purchase homes worth more than £937,000 than it was under the old system. Prices were so low that they were below replacement cost, further undermining the prospect of a functioning housing market.

“The figures in the report over the last quarter show a healthy 3% quarterly increase in the index – with positive increases between 2% and 5% across all property types”, she added.

Prices for second-hand homes rose 6% year-on-year in June to £321,000.

On a month-by-month basis, average house prices across the UK rose by 0.4%, the ONS said.

“From families trapped in expensive and insecure private renting, to young people stuck in their childhood bedrooms, a stable future is spiralling further and further out of reach for millions”. Stamp duty is putting people off buying as it feels more cost effective to rent.

“There has been a steady increase in prices over the past year to 18 months”, he said.

However, the scale of the recent house price surge in the capital had tailed off significantly as London workers increasingly look to move into commuter towns in the East and South East of England. “Demand is good for the right home”.

Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that price rises in London continue to be overpowered by the East and South East for the moment. In the year to June 2014 prices rose 19.3pc.

But over the past year this has dropped to just 5.5 per cent, the Office for National Statistics said this morning.

And although it’s hardly a consolation, house prices were outstripping wages at an even faster pace earlier this year.