THE severe weather at the end of last year didn’t help activity in the Northern Ireland housing market, according to the latest RICS (Royal Institution of Chartered Surveyors) and Ulster Bank Housing Market Survey.
The survey’s indicator for transaction volumes fell to its lowest level for a year in December, with the freezing conditions a significant factor, according to RICS housing spokesman Tom McClelland. The December survey’s price balance also remained at one of the lowest levels recorded since mid-2009.
Mr McClelland says: “December is generally a quiet time of year, but the severe weather, combined with the speculation and uncertainty around public spending cuts, certainly exacerbated the situation”.
He continues: “On the positive side, we welcome the fact that a four-year budget is now in place and we are seeing individual government departments publishing their spending plans. This helps from the perspective of providing some degree of certainty in the local economy, particularly as the picture emerging is not as bad as some had expected or where predicting. That said, public sector job losses and spending cuts will continue to be a factor in 2011, acting as a drag on the economy.”
Mr McClelland points out: “The attitude that lenders take to non-performing loans will have a bearing on the market in 2011. There has been a high degree of forbearance, but this couldn’t continue indefinitely. We will likely see a rise in repossessions, with properties then put onto the market at realistic price levels. This has the potential to set a price benchmark that could act as a catalyst for movement in the market.”
He adds: “We will almost certainly see interest rates rise during the course of this year, which will increase the cost of borrowing. However, this is from historically low levels, and it must be noted that affordability in Northern Ireland has improved dramatically in recent years. By some measures, Northern Ireland is now one of the UK’s most affordable regions. Indeed, we are now seeing some former buy-to-let properties selling at close to 2004 levels.”
Derek Wilson, head of lending products at Ulster Bank, says: “The emerging outlook for the housing market is certainly not clear-cut. However, Ulster Bank remains strongly committed to leading the way in the mortgage market in terms of lending levels and introducing measures that encourage and support demand.”
The survey’s price balance in the latest survey is at -49. (This is the percentage of chartered surveyors who say prices rose in the past three months minus those who say they fell.)
The survey’s transaction balance in the latest survey is at -15, its lowest level since December 2009 and the second lowest level since July 2008. (This is the percentage of chartered surveyors who say prices rose in the past three months minus those who say they fell.)