First of all let me clarify that the property market in the rest of the UK has no bearing to Northern Ireland, any statistics predicted or reported there have no relevance here.

 A few examples of this are:

(i)                  The property market in the rest of the UK  rose by 30% in 1988 whereas the market here remained static.

 

(ii)                The market during our property boom from 2005 to 2007 increased by 100% whereas this increase was not reflected in the rest of the UK.  Consequently when the NI  market dropped from 2008 to 2012 any increase was totally wiped out leaving property prices back to the level in 2002.

(iii)              Since 2012 the property market has been recovering and growing even though it has been single digit increases, it is much healthier; growing in confidence and with bank lending based on affordability more sustainable.

Next let me cover briefly why we had a property boom.  Largely due to  irresponsible bank lending, for example at the height loaned applicants 6 x Joint income; self certification mortgages readily available and unlimited amounts of money being loaned for the “buy to let” market. As a result introducing thousands of borrowers into the speculation market and terrace houses rose to the dizzy heights of £175,000.  This being the base rung of the ladder everything else got into line with the million pound detached property becoming the norm. Therefore it should be no surprise that when the banking crisis hit the Northern Ireland property market, it went into meltdown and we were the worst hit region in the UK, simply because we had the furthest to fall.

Finance and greed had a massive part to play in the Northern Ireland boom and bust scenario. But let me follow on by saying that the finance and banking world is in a much stronger position than it has been, with the appropriate emphasis on the consumer and affordability being at the forefront of lending.

In conclusion, whether we voted to remain or leave, there are fundamental principles that have not changed.

 

The Northern Ireland property market can not fall any further than it already has. Affordability and consumer protection is now paramount in the minds of the lending institutions and as such there is a solid foundation on which to build.

The pound will be underwritten by the Bank of England to the tune of £250 Billion, interest rates may come down but certainly will not increase in the near future.  With attractive 2 year and 5 year fixed rate deals, now is as a good time to buy a property in Northern Ireland as it was pre Brexit

 

 

George Martin FNAEA

Senior Partner

Cowley Property