The financial and economic soothsayers aren’t quite in step at this stage. In the aftermath of the Brexit vote on June 23, there are what appear to be conflicting signs and messages on where the UK is currently and, more importantly, where it is likely to be 12, 18 or 24 months hence.
In the midst of the confusion arising from these contradictions, however, two things remain steadfast; (a) the population isn’t shrinking and (b) people are going to continue to need a roof over their heads.
Logically, then, there will be an on-going demand for homes. And where demand produces competition, history shows that this nudges prices upwards. Add the on-going record-low interest rates, and, in particular, some exceptionally good offers on fixed-rate mortgages right now, and you end up with a list of factors which point to some pretty positive activity in the housing market.
The demand for residential accommodation, houses (be they of the detached, semi or terraced variety), bungalows, flats and apartments, offers significant encouragement for those selling property at the moment.
Simultaneously, the low interest rates represent very good news for those buying. Together, those two things augur well for the state of the housing market.
Sean Murphy, Ulster Bank’s Regional Managing Director (Branch and Private Banking), has said: “The imbalance between supply and demand in key population centres puts upward pressure on prices.” There was, however, a note of warning when he added: "Unsurprisingly, there is uncertainty in the wider economy and the housing market cannot be immune.”
But his optimistic finale was: “However, we continue to see good mortgage demand from home-buyers and the key thing for them remains to secure finance that is affordable and meets their own circumstances.”
It is self-evident that property sells faster in those ‘key population centres’ to which Sean Murphy referred. That old ‘location, location, location’ mantra rings as true today as when it was first uttered.
It is also the case that even within those ‘key population centres’, specific types of houses in certain roads, avenues or cul-de-sacs will sell more quickly than others. Why? For the simple reason that when it comes to des res, there are homes which tick boxes that others do not. And it is also true that those with most money will spend it in order to maintain that sort of exclusivity.
Certainly thriving estate agents, Aria Residential, are confident that the Northern Ireland market is moving in the right direction. And they should know, for having seen what happened when prices here nosedived in the recession that followed the crash of 2007-08, they would recognise any danger signals. Aria Residential’s optimism stems from the numbers of new-build homes becoming available at affordable prices. Certainly those prices are far more realistic than the valuations of the similar properties in the mad mid-2000s.
That is bringing appropriately named ‘first-time’ buyers into play, appropriately named because for the ‘first time’ in years prices are in step with reality.
Another cause for optimism is the fact that despite the price plunges which dumped so many of those who bought property into negative equity at the peak of the boom, bricks and mortar are back in vogue. Why is that? Because with interest rates offering so little incentive to save, those with money wish to invest it in something with the likelihood of a greater rate of return. Thus property has regained its popularity, and its reputation for security, it briefly lost after the big economic crash.
Another reason for Aria Residential’s upbeat mood is that although landlords were dealt a blow following the increase in stamp duty on investment property and second homes earlier this year, nevertheless they have kept faith with property.
As those landlords see it, bricks and mortar still represent a better chance of growth on their investment than depositing money in the bank. Confidence is high among buyers, too, not least because they believe sanity has returned to a previously insane market. They were reluctant to become caught up in what they feared was likely to become a crazy bidding war.
Those days are over. Instead, what we have now are situations in which two, three or even four parties are bidding in a much more responsible manner, pushing the price up gently rather than wildly.
With house prices again realistic, all-time low interest rates and, as a result, many mortgages cheaper than rent, buying is again attractive.
Contact Aria Residential and put them to the test in confirming the validity of their positivity.