Belfast Telegraph

Saturday 1 November 2014

Ignore all the bad publicity, our property market is stabilising

Having observed various reports on the housing market over the last while, one would think that the property market is on a perpetual downward spiral.

With splash headlines it strikes me that media reports can become self-fulfilling prophesies.

In the heady days of the property boom Press stories fuelled the fever. Likewise today, negative media can have the effect of strangling any green shoots of positivity.

However, despite ongoing negative publicity, evidence on the ground demonstrates genuine signs of stability in the housing market.

At our Coopers Mill development in Dundonald we have had a total of 138 sales since the scheme launched in May 2009. Forty-three of these sales have been in 2011 - an increase of nearly 100% in sales at the same point in 2010. Bracken Hill, near Four Winds has had 18 sales this year so far, with each development attracting a different kind of purchaser.

At Coopers Mill the majority of purchasers are first-time buyers, whereas Bracken Hill comprises many purchasers moving up the property ladder.

Undoubtedly, financial institutions have become much stricter in their lending criteria. This is not an entirely negative factor when we reflect on the approach to mortgages in the midst of the "property bubble".

However the fact remains that the majority of potential purchasers find ways to meet lending criteria and this is not as big an obstacle as it is perceived to be.

A marked increase in lender appetite looks set to continue as the uncertainty the banks and building societies experienced at the end of 2008 has been replaced with a renewed confidence in 2011.

During the first quarter of 2011 purchasers benefited from a greater number of mortgages available requiring a 10% deposit. In recent months there have been a number of institutions offering mortgages requiring a 5% deposit.

When combined with the continued low Bank of England interest rate, conditions within the mortgage market are continuing to improve.

To keep the property market fluid, customers with a property to sell need to fully accept that they are not going to get 2007 prices for their own homes.

Invariably however, the home they want to buy will not be for sale at 2007 prices either - particularly if a purchaser is buying from a homebuilder.

Within the industry we have had to quickly make realistic adjustments to our pricing in line with the market. The only parties who cannot avail of this scenario are those who bought at the height of the market and are now in negative equity.

We are currently employing a workforce of more than 200 people on various sites. A recent CBI report has stated that for every £1 invested in construction, £2.84 is generated for the wider economy. It is therefore imperative that confidence in the construction sector continues to grow in order to aid recovery in our regional economy.

Patricia McGinnis from the McGinnis Group

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