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Brexit deadlock increased effect on Northern Ireland housing market, says RICS & Ulster Bank Residential Market Survey

While Brexit stands at an impasse, the Northern Ireland housing market is showing increasing signs of the impact of ongoing uncertainty. Although it continues to lead the way in terms of optimism and resilience compared to other regions of the UK, the latest RICS (Royal Institution of Chartered Surveyors) and Ulster Bank Residential Market Survey does indicate a dip in surveyor confidence.

The March 2019 results show that the headline balance of respondents perceiving a rise in residential property prices over the last month remained in positive territory, but continues to ease back. Recent optimism for near-term prices has also dropped to a flat rate. Despite this, Northern Ireland performs strongly in comparison to the rest of the UK.

Current activity has experienced a slight slump, as new buyer enquiries and new instructions both took a downturn in March. It is therefore expected that the rate of sales in the coming three months will drop. Commentary from survey respondents noted a perceived ‘wait and see’ approach amongst both prospective buyers and sellers, as we remain without a definitive Brexit outcome.

Although recent results and near-term forecasts appear to be feeling the effects of the ongoing political ambiguity, surveyors remain optimistic for the longer-term future of the NI housing market. Indeed, while perhaps with more conservative predictions, the headline balance of respondents continue to believe that prices will rise within the next 12 months and sales will regain growth.

Samuel Dickey, RICS Residential Property Spokesman in Northern Ireland, said: “While the results do paint a challenging picture for the NI residential market, comments from surveyors are pointing towards an incoming increase in first-time buyer properties. This group in particular may welcome the easing rise in house prices and contribute to the positive longer-term outlook. Overall, the market remains relatively strong despite the headwinds and uncertainty of Brexit.”

Terry Robb, Head of Personal Banking at Ulster Bank, said: “Some people are perhaps taking a wait and see approach before deciding upon a move or purchase, but sales in the new build market in particular are currently quite strong and this is reflected in a steady demand for mortgages. With an increasingly supply of new build properties reported to be coming onto the market, this also bodes well for first time buyer activity in the months ahead.”

The main findings of the RICS & Ulster Bank Residential Market Survey

  • The balance of respondents perceiving an increase in house prices in the last three months remains the highest rate in the UK, at +34%. However, while 34% more surveyors believe prices have risen than those who said they fell, this is a slight dip on the +36% response for February.
  • Near-term price expectations for the coming three months has fallen to a flat rate of 0, after a balance of +14% expecting a rise in the month previous.
  • The net balance of new buyer enquiries has fallen back into negative territory, at -31%. Similarly, the balance of new instructions in the last month has also lowered from -23% to -26%. Combined, this has led to a less optimistic prediction of sales in the next three months, with a net balance of -14%.
  • The 12-month forecast remains positive, but has also seen surveyors respond more conservatively. The expected sales in the year ahead are at +38%. While the balance of those expecting prices to rise is strong, it has fallen from +93% in February to +59% in March.