Business

Northern Ireland housing market in major slowdown following Brexit vote, RICS find

The housing market is in slowdown following the EU referendum

UNCERTAINTY following the EU referendum result has lead to a major slowdown in the Northern Ireland housing market, according to surveyors.

The latest Residential Market Survey by the Royal Institution of Chartered Surveyors (Rics) and Ulster Bank found there was a significant lowering of expectations in June.

Although the price balance remains in positive territory, it is at its lowest level in three years.

The number of new home buyers coming to market fell for the third month in succession.

Uncertainty following the shock vote for Brexit along with the impact of higher stamp duty fuelled the downshift, the report said.

And the majority of surveyors anticipate prices to lower over the next three months. It's their most negative outlook since May 2013.

Surveyors reported a rise in sales during June following a disappointing May but their expectations for the next three months are their lowest since October 2012.

Rics residential property spokesman Samuel Dickey said the survey "gives an early indication of what is happening in the market, and it is not surprising that the uncertainty in the wider economy is impacting on housing market sentiment in some areas".

"However, only after the initial shock of the past couple of weeks has passed will we get a clearer picture of how the market is faring. A lack of supply has characterised the Northern Ireland housing market in recent years, particularly in greater Belfast and this should continue to be a factor," he said.

The most recent official figures put the cost of buying the average home in the north at £117,524 over the first three months of the year.

Sean Murphy from Ulster Bank said the anticipated downturn followed a "relatively strong" first half of 2016.

"And the imbalance between supply and demand in key population centres put upward pressure on prices," he said.

"Unsurprisingly, there is uncertainty in the wider economy and the housing market cannot be immune. However, we continue to see good mortgage demand from homebuyers, and the key thing for them remains to secure finance that is affordable and meets their own circumstances.”

Commenting on the overall UK picture Simon Rubinsohn, RICS chief economist said: “Big events such as elections typically do unsettle markets so it is no surprise that the EU referendum has been associated with a downturn in activity.

"However even without the build up to the vote and subsequent decision in favour of Brexit, it is likely that the housing numbers would have slowed during the second quarter of the year following the rush in many parts of the country from buy to let investors to secure purchases ahead of the tax changes.

“RICS data does suggest that the softer tone to the market will persist over the coming months but the critical influence looking further is how the economy performs in the wake of the uncertainty triggered by the vote to leave. Respondents to the survey are understandably cautious but with interest rates heading lower and sterling significantly so, it remains to be seen whether the concerns about a possible stalling in both corporate investment and recruitment are justified.’’

Enjoy reading the Irish News?

Subscribe now to get full access

Business