The UK housing market is tipped to feature prominently in the Chancellor’s Budget. A range of initiatives are expected to be unveiled, targeted primarily at the younger generation. There are calls for a shift in emphasis from ‘Help to Buy’ to ‘Help to Build’ schemes. It remains to be seen how Northern Ireland will benefit from these. But it’s worth considering how the Northern Ireland housing building sector is currently faring.
Northern Ireland’s house building sector has been in recovery mode for the last few years, following the bursting of the property bubble a decade ago. Housing starts plummeted in 2008 and reached a low of just over 5,000 units in 2013. This represented a fall of two-thirds relative to 2005’s peak of 15,300. Since 2013, a depleted number of house builders have contributed to a 55% rise in housing start numbers. Over the last 4 quarters to Q3 2017 Northern Ireland housing starts totalled just over 7,800 – still half the number 12 years ago. The subdued rates of house building are arguably a significant factor behind the recent surge in house prices. In Q3 2017, the median price of a new build property in Northern Ireland increased by 18.5% y/y.
The latest figures released by the Land & Property Service suggest the recent recovery may be running out of steam. Q3 2017 was the quietest third quarter in three years with housing starts falling 15% y/y. This represents the steepest year-on-year decline since Q1 2013. Belfast (-48% y/y) posted the steepest decline of the local district councils followed by Causeway and Glens (-44%), Ards & North Down (-28%), Lisburn and Castlereagh (-23%) and Fermanagh & Omagh (-22%). Meanwhile Derry & Strabane (+58%), Mid Ulster (+10%) and Armagh, Banbridge & Craigavon (+5%) bucked the wider trend. Armagh, Banbridge and Craigavon posted the highest number of starts in Q3.
The Budget tomorrow will likely include a range of measures that impact on the demand for and availability of housing. We await to see what the Chancellor unveils.