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Consumers in the north the most pessimistic about UK economy, says report

CONSUMERS in the north are most pessimistic about the prospects for the UK economy, according to a new report.

Analysis from Which? for 2018 shows that two in five people (42 per cent) in Northern Ireland believed the UK economy was in a poor state last year, while almost two-thirds (60 per cent) expected it to deteriorate in 2019.

By contrast, across the UK as a whole, only half (49 per cent) anticipated the economy would worsen.

Of chief concern was rising fuel prices, cited by three-quarters (74 per cent) of local respondents, compared to two-thirds in the UK (68 per cent).

Brexit was highlighted by seven out of 10 (71 per cent) consumers as a worry, along with public spending cuts, both to a greater degree than in the UK as a whole.

Energy bills and the cost of groceries were also among the most common worries for consumers in Northern Ireland.

More people in the north expected to increase spending on everyday essentials compared to consumers across the UK, according to the report, while hikes were also forecast in the cost of groceries and in relation to rent or mortgage payments.

In spite of the plethora of issues raised by consumers in the north, 71 per cent said they were satisfied with their life overall, compared to two-thirds UK-wide (65 per cent). Local people were also happier about their household financial position, with over half (51 per cent) describing it as good,

just above the UK figure of 49 per cent.

Caroline Normand, Which? director of advocacy, said the latest figures for Northern Ireland were concerning.

“This report highlights a worrying sense of pessimism among consumers in Northern Ireland, with Brexit, fuel costs and public spending weighing on people’s minds more than anywhere else in the UK,” she said.

“With uncertainty around Brexit and Stormont politics looming large, politicians, regulators and businesses in Northern Ireland must take heed of these findings and work to ensure consumers are not getting a raw deal when it comes to essential services.”

Source: Irish News

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Northern Ireland is UK’s strongest performing region for house price growth says index

NORTHERN Ireland remained the strongest performing UK nation for rising property prices in quarter one, according to a new index.

Property values in the north are up 3.3 per cent over the last three months, taking the average house price in the region to £142,484, Nationwide Building Society said.

However, the growth rate has softened from 5.8 per cent in the last quarter.

Elsewhere, average house prices in England recorded their first annual fall since 2012, as property values in London tumbled at their fastest year-on-year rate in a decade.

House price growth across the UK remained subdued overall in March, with prices just 0.7 per cent higher annually.

Property values edged up by 0.2 per cent month on month across the UK, taking the average house price to £213,102.

Across England, house prices fell by 0.7 per cent annually in the first quarter of 2019, reaching £255,683 on average.

The fall in the average house price in England was driven by declines in London and the South East – with prices still climbing in many other parts of the country.

Nationwide said it was the first annual price fall in England since the fourth quarter of 2012.

In London, house prices fell by 3.8 per cent annually in the first quarter of 2019.

Nationwide chief economist Robert Gardner said: “London was the weakest-performing region in quarter one, with prices 3.8 per cent lower than the same period of 2018 – the fastest pace of decline since 2009 and the seventh consecutive quarter in which prices have declined in the capital.

“This trend is not entirely unexpected, however, as it follows several years of sustained out-performance which left affordability more stretched.

“Policy changes that have impacted the buy-to-let market in recent years are also likely to have exerted more of a drag in London, given that the private rental sector accounts for a larger proportion of the housing stock in the capital than elsewhere in the country.”

Nationwide said that across the UK, Northern Ireland saw the biggest annual increase in house prices in the first quarter of 2019 with a 3.3 per cent uplift – although house prices in the region are still well below their 2007 peak.

Mr Gardner continued: “Northern Ireland remained the strongest performing home nation in quarter one, although annual price growth softened to 3.3 per cent, from 5.8 per cent last quarter.

“Scotland saw a slight pick-up in annual price growth to 2.4 per cent, while Wales saw a marked slowing in growth to 0.9 per cent (from 4.0 per cent last quarter).”

Mr Gardner said house prices across the South of England, and to a lesser extent in the Midlands, are well above pre-financial crisis peaks, while those in Northern England, Wales and Scotland are still close to 2007 levels.

“However, prices in Northern Ireland are still more than 35 per cent below the all-time highs recorded in 2007,” he said.

Howard Archer, chief economic adviser at EY Item Club, said: “March’s soft house prices reported by the Nationwide maintain the view that the housing market is currently being hampered by challenging conditions, with buyer caution currently being reinforced by heightened Brexit and economic uncertainties.”

Sam Mitchell, chief executive of online estate agent Housesimple, said: “Monthly figures are starting to show a common theme, with positive growth in the Midlands and North of England and negative growth in and around London.

“This is likely to be the pattern for the foreseeable future, until the EU situation is resolved at least, as the impact of protracted Brexit negotiations drags more heavily on the London market.

“The market would have preferred a decision one way or the other. Instead, we are now in this state of short-term limbo, leaving many buyers and sellers unsure what to do.

“Normally, we would expect to see a spike in transaction levels around this time as we enter the traditional spring bounce period, but with the extension to the EU leaving date, the bounce is likely to be a little subdued this year.”

Source: Irish News

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Northern Ireland sees UK’s third-strongest annual house price growth, says Nationwide index

HOUSE price growth remained stable across the UK in September, with Northern Ireland identified as among the three top-performing regions behind Yorkshire/Humberside and East Midlands, according to an index.

Across the UK, house prices edged up by 0.3 per cent month on month in September to reach £214,922 on average, Nationwide Building Society reported.

Property values were up by 2 per cent annually in September, following a 2 per cent year-on-year rise also seen in August.

Looking across the UK, Yorkshire and Humberside saw 5.8 per cent annual house price growth in the third quarter of 2018, making it the strongest-performing area for the first time since 2005.

In Northern Ireland, property values were up 4.3 per cent to an average £139,374, according to the Nationwide study.

At the other end of the spectrum, the North East of England saw a 1.7 per cent decrease in house prices.

Some parts of southern England, including London, also saw house prices fall annually in the third quarter.

House prices in the capital have fallen annually for five quarters in a row – although the latest decline is “modest” at 0.7 per cent, Nationwide said.

Property values in London are only 3 per cent below a record high seen in 2017 and still sit more than 50 per cent above their 2007 levels.

Robert Gardner, chief economist at Nationwide, said: “Annual house price growth was stable in September at 2 per cent.”

He continued: “Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates.

“Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low.

“Overall, we continue to expect house prices to rise by around 1 per cent over the course of 2018.”

Howard Archer, chief economic adviser at EY Item Club, said: “We suspect that the housing market will be relatively lacklustre over the coming months – although there are varying performances across regions with the overall national picture dragged down by the poor performance in London and parts of the South East.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “As in 2016, prospective buyers increasingly will hold back from making purchases until the threat of a no-deal Brexit in March 2019 has been expunged.

“Accordingly, the housing market likely will remain subdued for at least the next six months.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “Once again, we are finding that the market continues to be supported by a shortage of stock and low mortgage rates, as well as new buyers returning from holiday keen to take advantage of some more realistic pricing.

“It is a mixed bag, however, because activity and prices in London remain challenging whereas in many places outside it is quite a different picture.

“This is mainly due to historic affordability reasons, particularly when this well-respected index confirms London prices are still more than 50 per cent above their 2007 peak.”

Source: Irish News

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Growth of commercial property market ‘reliant’ on functional Stormont government

THE future growth of the commercial property market in Northern Ireland is reliant on a fully functional Stormont Executive according to CBRE.

Recent research from the firm shows the north’s commercial property market continues to be resilient despite the ongoing political uncertainty, but said there is no doubt the impasse has had a negative impact.

“The current political situation has no doubt had some negative impact on the local economy and commercial property market, and will continue to do so should the Stormont stalemate persist,” CBRE managing director Brian Lavery said.

“During an unsettling period of political uncertainty, the continued future growth of the commercial property market in Northern Ireland is reliant on a fully functional local Government being put in place.”

The Northern Ireland commercial investment market has been largely dependent on Great Britain and international investment spend, according to the most recent investment analysis in Northern Ireland. The two markets make up 87 per cent of the £1.64 billion spend over the last five years from 2013 to 2017.

CBRE director, Gavin Elliott believes this can grow even further and feels Brexit must be viewed as an opportunity.

“It is important that Belfast takes full advantage of its unique position between Dublin, London and Europe to drive further growth through real estate investment funds in Great Britain and further afield.

“The local market should be well placed for further future Great Britain and international investment following the deal agreed between the Conservative Party and the DUP, which secured an additional £1 billion funding for Northern Ireland.”

The north’s investment market throughout 2017 has seen an increase in transaction volumes from the previous year, with £316 million being invested across 43 separate transactions. This compares to £248 million invested across 36 transactions in 2016. Notable transactions include the £123 million sale of CastleCourt Shopping Centre to Wirefox, Tesco Extra, Newry at £27.3 million to Investec and Great Northern Retail Park in Omagh to an Northern Ireland pension fund at £9.2 million.

The retail sector has also continued to perform well with the advantage of the current exchange rate and cross-border trade. The market saw a plethora of new entrants in 2017 as well as increased footprints by a number of relatively new retailers including Smiggle, Oliver Bonas, Hotel Chocolat, Sostrene Grene and Newbridge Silverware.

The office market finished the second half of the year in a considerably stronger position with 33 transactions completed bringing the yearly total to 430,290 sq ft, while 2017 saw a number of lettings and freehold acquisitions agreed for new design and build options. This includes large office transactions to HMRC, All State and Concentrix.

Meanwhile six hotels transacted in 2017 worth £42 million, with a number of proposed completion dates agreed for the first quarter of 2018. The bedroom stock in Belfast further increased to approximately 3,600 with the opening of The Titanic Hotel in September, extension to the Bullitt Hotel in November and part of Ten Square’s extension during the year.

CBRE expects that yields across all sectors within real estate in Northern Ireland will remain relatively stable over the next 12 months.

Source: Irish News