The property market in Northern Ireland formally reopened on 8th June 2020 so after 2 1/2 months "On Ice". 3 months on what has been happening?
FIRST TIME BUYERS
Prior to lockdown the market was largely driven by first time buyers with mortgages available up to 90% LTV and a few schemes allowing borrowing up to 95%. Since lockdown lenders have restricted their new mortgage lending to 85% for a number of reasons:
1) Staff on Furlough - Lenders own staff on furlough or self isolating has meant backlogs and delays in getting mortgage applications processed so capacity is reduced.
2) Priority given to existing mortgage clients - With many people suffering financial stress during lockdown, or even losing their jobs, lenders are busy dealing with increased calls from existing mortgage customers needing help so staff have had to be reallocated to deal with these calls.
3) Fears of a property market drop - Concerns about a drop into genuine recession have led lenders to build in some added protection for themselves and requiring buyers to put down a larger deposit improves the risk profile in uncertain times.
The reduction in first time buyers has left a gap for home movers who have some equity in their homes and are generally in more stable employment roles.
A significant trend has emerged of home owners selling up to make a lifestyle change - typically towards homes with outside space, countryside locations or coastal villages. The option of working from home, which many people now have, is allowing someone to buy a home in Cloughey or Kircubbin or Ballywalter who previously wouldn't have tolerated the daily commute from these locations into Belfast. The value for money in these areas is now allowing home movers to have a bigger house, with good outside space and often close to the sea - a win,win,win situation.
To that degree there has been something of a mini "property boom" in the area with high levels of listings, sales being agreed quickly and a good turnover of properties on the market.
WILL IT LAST
That's the 6 million dollar question.
With the Furlough scheme being wound down and potential job loses to follow there remains significant pressure on home finances and confidence is modest at best. Uncertainty around further lockdowns or restrictions is making it difficult to plan a house move and the governments Stamp Duty Holiday is scheduled to end in March 2021 so we would expect market activity to settle back to more normal levels in the near future.
That's not to say we expect a market drop. Demand remains high. Interest rates remain low. Affordability is good and Northern Ireland, so far, has enjoyed limited exposure to the worst effects of the virus so there remains a degree of normality to the housing marketing despite all of these pressures. People will still need to move home for a variety of reasons so we see perhaps a slow down in activity but prices generally holding up to a large degree with perhaps some adjustment in certain sectors, such as apartments.