It has been reported that house building is key to Northern Ireland's economic recovery.

According to John Armstrong, Managing Director of the Construction Employers Federation (CEF) the new build housing sector is one of the key industries that can help turn round Northern Ireland's economic fortunes and create growth and employment.

Mr Armstrong explained that house building construction provides a unique "multiplier effect" on the local economy.

"Every £1 spent on direct building activity generates at least a further £2.84 in the broader economy. On top of that the construction of new houses it helps to create and sustain thousand of jobs in construction as well as in the aggregates and building materials sectors," he explained further.

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"The multiplier effect doesn't stop there. New houses have to be furnished and fitted with white goods, they need gardening materials, they need curtains and carpets, kitchens and bathrooms have to be chosen and fireplaces picked.

"The list is endless and these spin offs to the broader economy help to maintain literally thousands of jobs. These jobs in turn create both tax revenues and consequent consumer spending in the local economy," he added.

This claim comes amidst news that house prices have dropped between 40% and 50% from the peak in 2007.

However Mr Armstrong claims this adjustment in prices was necessary to take us from the unsustainable levels of house price inflation we were experiencing in late 2006 and early 2007.

It is however acknowledged by Mr Armstrong that problems lie with first time buyers who are unable to meet the requirements of mortgage lenders. This teamed with the inability of first-time buyers to collect the substantial deposits required has "hindered the recovery process".

Mr Armstrong said: "CEF has been actively trying to encourage local mortgage providers to turn on the 'lending tap' and increase liquidity in the mortgage market".

(LB/BMcC)