Is Negative Equity Still an Issue in Northern Ireland?
Property Prices in Northern Ireland are rising but is it enough to cure the Negative Equity epidemic post property boom?
Is Negative Equity Still an Issue in Northern Ireland? The answer is – it depends on where you live.
According to Ulster University Housing Price Index the average property price in Northern Ireland is now just under £150,000 and this represents a 9% increase over the same period measured last year.
Jon Frey from Northern Ireland Housing Executive stated “This is the highest annual rate of increase in house prices since the downturn in 2007”. It is in fact the highest price rise in 9 years.
Although finding a different percentile rise in prices the Department of Finance still showed an increase in property prices. They classified the rise at 7%. Finance Minister Mervyn Storey said: “I believe there is continued confidence in our housing market which is encouraging for the Northern Ireland economy as a whole.” The Minister also commented that there is a healthy level of sales in the country for the past two years and these sales figures are almost double what was experienced between 2008 to 2011.
Nonetheless, property prices are still down by over 50% from the peak of the market in 2007.
Geographically we see considerable differences across Northern Ireland.
Of particular concern is property in the Northwest Regions including Londonderry/Derry and Strabane which saw average prices fall by 20% from £113,662 to £90,451. This really bucks the trend we see across the rest of the country and is concerning for homeowners. Conversely prices are at their highest in South Belfast averaging at £210,000 and the markets of North Down and Ards showed consolidation and an average price of £141,000.
From a Bell & Company perspective this fits in with what we discuss regularly within the firm. We see many being over optimistic taking Belfast as their measure of property prices in Northern Ireland. The city is performing well and seeing rises across all areas and all property types. However, our concern is that country areas are being rather overlooked and the figures in the Northwest are worrying for borrowers who are in negative equity and still seeing their home values fall against the trend.
Overall then we are seeing some positive signs in the market with prices rises and sales increasing. There is still a long way to go to get even close (if we ever do) to 2007 price levels and the Northwest area and continual price declines is a concern that should be addressed.
If you are anyone you know is suffering from Negative Equity and doesn’t know how to move on then please call Bell & Company today on +44 (0) 2895 217373 to arrange a free initial consultation.