HOUSE prices in the north are continuing on an upwards trajectory - because people want to move and there's a growingly acute shortage of supply.

The latest residential market survey from the Royal Institution of Chartered Surveyors (Rics) revealed that growth in new home-buyer demand in Northern Ireland stalled in July, but the lack of supply is still driving house prices up.

It comes as one estate agent revealed that he has sold eight homes across the north in recent weeks with £1 million-plus price tags, including one in Co Tyrone for £2.5 million.

And it is understood another residential property in south Belfast will be coming on the market within weeks with an asking price well north of £3 million.

The Rics report, compiled in association with Ulster Bank, shows that new buyer enquiries balance moved into negative territory for the first time in more than two years (since June 2020). Newly agreed sales data also deteriorated, falling flat for the first time since February.

Limited stock is a pattern that the residential market has seen for many months, and this has continued into the second half of 2022, with surveyors pointing to a marked fall in new instructions to sell.

Although demand is seen to be easing, house prices are still on the rise with 84 per cent of respondents reporting a rise in house prices over the past quarter, and more than a fifth (21 per cent) expecting prices to rise over the next three months.

The price expectations balance is though now at its lowest since September 2020, reflecting a more cautious outlook due to higher interest rates and a weakening economic landscape.

On the sales outlook for the next quarter, a quarter of respondents expect to see an increase, which is down slightly from the previous month's figure of 32 per cent.

Rics' regional residential property spokesman Samuel Dickey says: “The demand for property of all types is still outstripping supply. The rental market also continues to be strong.

“But it isn't surprising to see some cooling in the market, which has been so buoyant for some time. We will likely see the higher interest rates and the cost of living continue to have some impact on demand in the coming months. But it is likely that the lack of supply will continue to be the main factor in the market.”

Terry Robb, head of personal banking at Ulster Bank, added: “Mortgage demand remains relatively good, with interest rates are still at low levels by historic standards, and our expectation is that there will continue to be good demand from home-buyers in Northern Ireland despite the low levels of supply of available properties.”