People renting rather than buying homes

At the moment people find it much more affordable to rent properties than to buy them.

Research has shown that average house prices in Londonderry have plummeted by 24.3 per cent over the year with the exception of detached bungalows for which the prices have risen by 3.6 per cent.

The average price of a terraced or townhouse in the city is now 88,227, with semi-detached bungalows at an average price of 110,690, and semi-detached houses coming in at 129,389.

For Londonderry, the overall average house price is 119,185.

This indicates that the extent of the price decline may be greater than anticipated.

2010's Quarterly House Price Index has been covered by the University of Ulster who worked in partnership with Bank of Ireland and the Northern Ireland Housing Executive.

The survey showed that over the previous year there had been an annual weighted rate of price growth of 2.4% but compared with the first quarter of the year the overall average house price actually showed a weighted decline of 2.5%.

The authors of the report Professor Alastair Adair, Professor Stanley McGreal and Dr David McIlhatton have said: "The positive side of the small rate of annual price growth and the higher volume of transactions are welcomed signs. However, the weaker price performance during the spring quarter suggests that recovery of the housing market is fragile".

The survey revealed that the average price of a house in the second quarter of 2010 was 163,459.

The Housing Executive's head of research, Joe Frey commented: "The latest analysis has confirmed our view, that the housing market will remain flat for some time to come. An additiional less obvious concern, however, is the impact of the new Governments' proposal for restricting housing benefit. These could have a very detrimental affect on both tenants' ability to afford to live in the private rental sector, and landlords' ability to charge viable rents."

This survey has too shown that the re-sale market has become more active as the new build sector represented a smaller proportion of sales in this quarter of just 26 per cent. It also suggested that there appears to be a considerable difference in the performance of sales within different house types, with some selling a lot more that others.

Geoffrey Ferris of Robert Ferris Estate Agents commented: "I don't particularly feel that there are any certain house types selling better than others. It really only appears to be ones of reduced price that are really selling at the moment. With the negative equity at the moment, people seem happier to leave their properties on the market longer and wait for values to rise than sell at the moment. There hasn’t been much change in the market this year, especially this quarter and I believe that the next two years will be similar.”

When asked about whether or not there has been many first time buyers he said: “There have been very few first time buyers as people are more financially able to rent at this time. People are finding that they can rent a three bedroomed, semi-detatched house for 400-450 per month while they would need to pay around 550 per month with a repayment mortgage if they were to buy. Renting is definitely more affordable.”

He went on to say: “I think that it will be another two years before the market begins to rise and people are happy to start selling again but unfortunately the market will most likely come further down before it begins to rise again”.