Brexit uncertainty ‘the biggest challenge to housing market’

The housing market is forecast to hold up but a greater degree of realism is needed to keep it moving
The housing market is forecast to hold up but a greater degree of realism is needed to keep it moving

As the Brexit deadline looms without an agreed deal following Tuesday’s Commons vote , Northern Ireland’s relatively buoyant housing market has continued to show signs of a slowdown according tot he figures.

However, the Residential Market Survey published by the Royal Institution of Chartered Surveyors (RICS) and Ulster Bank for February 2019 shows that Northern Ireland still remains in better shape than other UK regions the UK - despite 70% citing Brexit uncertainty as the biggest perceived threat to the market.

The results for February 2019 indicated that although the balance of respondents reporting rising house prices and an expected further increase in the near-term has eased back, Northern Ireland still reported the strongest balance across the UK regions in both categories.

The three-month outlook for sales activity is broadly flat. Although reports of new buyer enquiries have edged into positive territory, there was a slight downturn reported in the rate of new instructions.

Recent results and predictions for the next three months may indeed be tentative largely due to Brexit uncertainty, but the results appear to indicate an expectation that that the Northern Ireland housing market will withstand the pressure and bounce back.

The longer-term outlook is more optimistic, with the vast majority of respondents expecting prices to rise up in the next year and sales to be healthy as RICS residential property spokesman Samuel Dickey outlined.

“As the end of March draws closer, there is clearly some uncertainty, and unsurprisingly, there is some evidence of this in surveyors’ near-term expectations.

“Despite this though, it is encouraging that surveyor feedback suggests a more positive 12-month outlook and indeed the Northern Ireland housing market currently appears more resilient than other UK regions.”

Terry Robb, head of personal banking at Ulster Bank, said: “The Northern Ireland housing market is currently relatively upbeat when compared to other parts of the UK. However, in the current climate, some buyers and sellers may be erring on the side of caution, seen for instance in the lower levels of new instructions. Mortgage demand though remains relatively strong, and we continue to see good interest from potential homebuyers and movers.”

Simon Rubinsohn, RICS chief economist, said: “Although activity in the housing market continues to be weighted down by the lack of available stock, changes in the tax regime affecting property, and affordability; feedback to the latest RICS survey makes it pretty clear that the ongoing uncertainty around how Brexit will play out is the critical factor influencing both buyers and sellers. And with little sign that the issue will be resolved anytime soon, it could prove to be a challenging spring for the housing market and the wider economy.

“It is clear from professionals working in the market that this environment requires a greater degree of realism from those looking to move. A reluctance from some vendors to acknowledge the shift in the balance of power in the market will compound the difficulty in executing transactions.”