House prices appear to have stabilised across most of the UK according to latest figures from the Office for National Statistics.
The ONS said prices plunged ten per cent in Northern Ireland but “lack any movement” in the rest of the UK.
Prices stood at £225,283 on average in March across the UK, just a 0.4 per cent decrease on the same month last year, following a one per cent annual increase in February, the Office for National Statistics (ONS) said.
In Northern Ireland there was a sharp drop of 10.7 per cent, taking average prices to £134,128, which was put down to the market “normalising” following a period of rocketing prices before the financial crisis.
Ed Stansfield, chief property economist at Capital Economics, said: “During the 2000s house prices in Northern Ireland absolutely soared. This is the process of normalising.”
He said Northern Ireland does not have the same level of support to keep prices up that London and the South East have from relatively buoyant employment conditions and strong demand for homes from overseas buyers.
A recent survey from Halifax into how homes in local authority districts have fared since the peak of the housing boom found that the nine worst performers were in Northern Ireland. Top of the list was Craigavon, where prices have more than halved from £213,844 in 2007 to £103,383 last year.
The Halifax study said prices in Northern Ireland were the highest in the UK outside London and the South East in 2007, but the gains it had experienced were “ultimately unsustainable”.
The housing market generally is expected to remain subdued due to uncertainty over the economy in the midst of a recession and the crisis in the eurozone.
Lenders have been tightening their borrowing criteria and raising rates, making it harder for people to take out a mortgage.
The ONS figures also showed that England and Scotland saw price falls of 0.3 per cent in the 12 months to March to reach £233,203 and £179,222 respectively. Wales was the only country to see an annual price increase, with a modest rise of 0.4 per cent to reach £153,957.
London recorded an annual price decrease of 0.2 per cent, its first year-on-year fall since October 2009, but it continues to have the highest average house prices, at £368,049.
The annual decrease in England was also driven by a 1.4 per cent fall in the South East and a 0.9 per cent drop in the North East, while the South West recorded the largest annual regional increase, with a 2.2 per cent rise.
The ONS study said: “House prices continue to lack any real movement, with the current UK average price little changed from where it was at the beginning of 2011.
“This is with the exception of Northern Ireland, which has experienced strong falls in house prices since 2008.”
House prices fell by 0.6 per cent month-on-month across the UK and are less than £10,000 higher than January 2011, when they typically stood at just over £216,000.
Despite the flat market generally, prices paid by first-time buyers have risen by 2.8 per cent over the last 12 months, to reach £170,109.
Estate agents reported a surge in interest from first-time buyers this spring due to a two-year stamp duty concession for this sector of the market, which ended in March.
Meanwhile, the average price for homes bought by existing owners decreased by 1.6 per cent in the year to March, to reach GBP257,650.