The gentrification of the mean streets of Belfast during Northern Ireland’s recent property surge has been the starkest manifestation of the region’s much vaunted peace dividend.

But with prices now falling more sharply than in other parts of the UK, the feelgood factor is fading fast.

Since the Good Friday agreement in 1998 average house prices from a much lower base rose by a staggering 240%. In the UK as a whole, which was experiencing its own property boom, prices rose 165% over the same period.

The improved security climate following the paramilitary ceasefires encouraged buyers. The market also attracted outside investors, particularly from the Irish Republic, bidding up prices. The first-time buyer was often squeezed out.

But the market overshot and has been falling since late 2006. The international credit crunch, which has made banks more reluctant to lend, has accelerated the trend.

Financial Times