Legal: The investment that's still as safe as houses
In our weekly series on legal matters, Gavan Holmes, head of the property department at Walker Legal, considers the renewed long-term investment potential of bricks and mortar
Property has always traditionally been viewed as a steady investment. Experienced investors always took the medium to long term view on capital value. Many of those who simply speculated on the property market and "flipped" property for a quick capital gain are largely no longer in the market. However, experienced investors who have been in it for the long run are now returning.
Investment in all types of property is re-emerging as a preferred option. In our opinion the main impact on the local market to date is a lack of good quality supply, so any demand for a good investment opportunity cannot be matched.
So the greatest challenge in the property market at the moment is the lack of good quality secure investments. However, it has to be said that the property market in general obviously goes in cycles and we don't think there is any doubt that the NI property market both in a commercial and residential sector is on an upward trend. Our opinion is that with interest rates currently still low (and likely to remain low for some time to come) this is only going to encourage people and particularly investors back into the market.
One area in which we have experienced considerable growth and ever continuing demand, is in the Grade A Office Space sector.
It is well publicised and established that Belfast, in particular, needs better office accommodation to attract the investor but also to entice companies from outside NI to the market here. That is improving and growing and in recent months we have seen a significant rise in the acquisition of office premises for owner occupation. We wouldn't limit this to just Belfast - even provincially there is a significant lack of good quality office space for the companies and business operating there.
All in all, there are clear opportunities for buyers and sellers in the current market. However, while we are lawyers we think the advice to investors will probably be to have a diverse portfolio probably with a mix of commercial and residential elements to it to reduce the risk and exposure.
Patience is the key for investors as doubling your money overnight is simply not going to happen. Our opinion is that our customers in the commercial and residential investment market need to be taking a 10 year view on return and capital appreciation. However, the general mood and sentiment remains positive and upbeat and the market continues to move forward. As the wider economy continues to improve and we hopefully see some movement at Stormont we will keep going in the right direction.
Contact Walker Legal at 6 Bridge Street, Portadown, BT62 1WL, tel: 028 3833 7591 and Scottish Provident Building, 7 Donegall Sq West, Belfast, Co Antrim, BT1 6JH, 028 9091 8461
Seeking to invest in property? Find the best option for you at propertynews.com