House prices in the UK increased by 4.2% during the last three months of 2006 with the market in Northern Ireland continuing to outperform elsewhere, according to new figures from Halifax today.

The biggest price rises in the 4^th quarter were in Northern Ireland (15.9%), Greater London (6.6%) and Wales (5.1%). 

The smallest increase was in the North (0.9%). 

Northern Ireland recorded a 53% increase in its average house prices over the year; the biggest regional annual gain since 1988 (West Midlands: 60%). 

2007 regional prospects

All regions are expected to record lower house price growth in 2007 compared with 2006, said the quarterly report from the lender.  Northern Ireland will record the highest house price rise for the second successive year although growth is forecast to fall from 53% to 15%. London (8%) is expected to see the biggest increase in prices in England as demand is underpinned by a buoyant regional economy. 

Armagh, Carrickfergus, Newtownabbey are amongst the towns expected to experience the biggest rises.  These towns currently have average prices below the average for Northern Ireland, making them attractive as buyers increasingly hunt for bargains.

Martin Ellis, Halifax chief economist, said: "All parts of the UK have seen substantial house price gains over the past decade with Northern Ireland recording the biggest gain since 1996, boosted by a 53% rise in 2006.” 

“London, the South West and East Anglia have also recorded at least a tripling in house prices in the last ten years.”

“A fundamentally sound economic background will underpin another healthy year for the housing market this year. High levels of employment, continuing economic growth, and a persistent lack of supply should ensure that house prices increase further. Higher interest rates, greater pressure on household finances and subdued real earnings growth will, however, curb housing demand.” 

“House price growth is set to ease as a result in all regions of the UK in 2007 with prices rising nationally by 4%."