Editor's Viewpoint: Positive figures but not home yet
As the Bank of England meets today to decide whether or not to increase its historically low base rate, the good news on the property front in Northern Ireland is that the recession seems to be bottoming out.
In the last three months of 2009, according to a University of Ulster survey, house prices fell minimally and the authors predict that this year could see modest increases.
But the really encouraging sign was that the number of transactions rose to their highest level in two years, the surest sign of public confidence. Admittedly, around one third of the properties which went on the market were new build and probably represented good value for money.
With the price slump over the past two years homes are now much more affordable for first-time buyers, but only if they have substantial savings |behind them. Banks and building societies are generally offering only 80% mortgages, meaning first- time buyers need to have at least £20,000 before even considering buying. Having been profligate in the past, the financial institutions are now showing the prudence of a miser with his pockets sewn up. Some slackening of the shackles is needed.
The cleft stick that first-time buyers find themselves on means that there is a ticking time bomb in the local housing market. Unable to buy and with less and less social housing available — the Housing Executive’s funding has collapsed because fewer and fewer tenants are buying their properties — more people are being forced into the |private rented sector which can be very expensive. Where will those unable to afford the landlords’ rents go to get a roof over their head?
However, for those already on the property |market and fortunate enough not to have |negative equity, this is a time of opportunity. |That dream home is now much more affordable. That alone should bring much needed vitality into the local marketplace.