With the ongoing cost of living crisis and general market instability, buying a property in Northern Ireland can feel like a minefield.
est Property Services is a 5th generation family business with over 130 years’ experience in the sales of land, commercial and residential properties in Northern Ireland, with offices in Newry and Warrenpoint as well as Dungannon.
1. Understand the current market
The overall market has slowed, mainly due to recent interest rate increases and an increase in the cost of living, although some sectors are still seeing strong interest levels, such as larger family homes and detached homes. Investment properties are also in demand, due to the shortage of rents and the high monthly rental rates. Rising interest rates have had a particular impact on the first-time buyer market with mortgages typically seeing increases of between 40 and 50% since early summer this year.
2. Be realistic with your sales expectations
When evaluating new properties, it is important to price accurately in light of current conditions. In some cases, we may advise homeowners and sellers that negotiating a number with a willing, willing and able buyer is the most sensible option, rather than waiting or anticipating a bidding scenario to unfold.
3. The demand for new buildings is increasing
There is a shortage of newly built homes, particularly in the wider Newry area, due to the lack of available sites and the sharp increase in construction costs. This has negatively affected the viability of some projects that might otherwise be in the pipeline. Don’t discount existing homes when looking for your next purchase.
4. Take advantage of discounts on stamp duty
Earlier this fall, the UK government announced changes to stamp duty. This is the tax due on any home purchase, and the amount of tax due depends on the value of the home. With the new changes, now more people will not have to pay this duty in their new homes. The changes have had a definite positive impact on both first time buyers and home movers and is likely one of the reasons why the larger family detached market continues to be in high demand.
5. Have you considered joint ownership?
In addition to reductions in stamp duty, the joint property value limit has been increased to the upper limit of £190,000. Shared Ownership offers those who cannot afford to purchase a home themselves the opportunity to purchase a share of your property and rent the remainder from Shared Ownership, a registered housing association. The shared ownership changes have had a positive impact in Northern Ireland where a much larger range of properties can now be considered by buyers who take advantage of the scheme and as a result we have seen more mortgage brokers advising clients on this potential avenue to buy.
6. Be aware of potential price fluctuations
There is always the potential for prices to rise or fall in the housing market, but a lot will depend on the health of the overall economy and especially any future rise or fall in interest rates. It’s probably too early to make a call at this time, but we recommend keeping an eye on this while you search for a new property.
7. The benefits and drawbacks of buying now
The main benefit of buying a home now, if you’re currently in a position to do so (i.e. have financing or mortgage approval), is that it’s less competitive. There are still willing sellers, the buying total is down from early 2022 levels, and as such, there isn’t the same level of competitive bidding situations, which could mean a less stressful buying process.
On the flip side, the current mortgage market is still quite volatile and should be approached with caution when buying a home. We are also experiencing a potential lower supply of properties coming to the market, which can make it more difficult to find your perfect home.
8. Sellers should not be discouraged
Selling has always been about matching a seller and buyer who are willing, willing, and able to move forward with the sale of the home. For those navigating within the current market, timing doesn’t matter so much; The main consideration should always be, whether the property or area is suitable, and whether it is affordable in your situation.
9. Check your property’s energy rating
Energy efficiency in a property has always been a strong consideration for buyers, but even more so over the past 12 months with the marked increase in energy prices. As a result, we have seen buyers show a preference for higher rated properties with recent boiler and insulation upgrades. Properties with a higher energy rating will be more efficient at heating and can save you money in the long run with cheaper energy bills.
10. Renting may be a better option for some
While there is a strong and persistent desire to own a home in Northern Ireland, renting may still be a better, more affordable option for some. However, there is always a degree of uncertainty regarding rental properties surrounding potential lease lengths and rent increases. As with mortgage rates, we’ve seen rent payments increase sharply over the past couple of years, and when mortgage payments and rents remain relatively close in this way, many will look to choose to buy a property instead of renting, given the added security of home ownership.