Thursday Dec 10 2009

Northern Ireland’s property price crash may have run its course, according to recent surveys, but who are the winners and losers in the local house market?

The latest figures from the University of Ulster’s House Price Index pointed to a modest 2% hike in house prices during the last quarter, but sales are still sluggish.

Meanwhile, industry experts have claimed any talk of dramatic house price growth is premature.

And while house prices are on the up, so too are the province’s repossession figures. They rose by 12% in the third quarter of this year to 1,124. This figure has almost doubled since 2005 when there were 623 repossessions.

And it’s a far cry from the heady days of the 2006 boom when the average price here rocketed to £250,000. Now it’s a more affordable £164,017 following the bust of July 2007 when prices plummeted by up to 40%.

Despite the white knuckle ride of recent years, house price reports earlier this year painted an optimistic picture and the market appeared to have found its form with property values on the up, albeit by the smallest of margins. And while the lucky few watched their humble abodes more than double in value when the market peaked, others are now paying the price following its crash and are stuck in a negative equity trap.

The credit crunch and ensuing banking crisis have made 100% mortgages a thing of the past with aspiring homeowners having to stump up a 10% plus deposit in a bid to get the best home loan deals and most competitive interest rates.

Unsurprisingly, homeowners now want to know what is going to happen next, while housing experts have claimed there is evidence of a market in recovery. But who has emerged unscathed in the game of property snakes and ladders?

Who won, who lost, who’s still playing ...?

The owners who are stuck in negative equity

Room for improvement — Bangor couple Jenni McKnight and Jamie Mendez with son Owen

Jenni McKnight (25) lives with her partner Jamie Mendez (23) and their two-year-old son Owen in a two-bedroom end terrace just off the High Donaghadee Road in Bangor

We bought our first house in Grovehill Gardens in October 2007 for £180,0000. It is very well furnished and modern with a long back garden, so in some ways it is slightly different to others nearby. Similar houses in this area are currently on the market for between £140,000 and £145,000, although there are new houses in the area for sale at £120,000. Our house is older and needs work done to it.

It is very hard when you see your friends living in brand new houses with three or four bedrooms, with no work to do, which cost £20,000 less than what we paid. We bought a house in a good area and I didn’t think it would drop like this. When we bought this house the asking price was £185,000 which we thought was expensive at the time. The buyer eventually accepted £180,000 but we had to push ourselves to the limit to afford it.

We decided to buy when Owen was born and we wanted to be independent and have a go at owning our own home.

My parents have always lived in a large house and there was enough room for all of us, but we wanted our own space.

We wanted a good area that was near the primary school we had in mind for Owen and this was perfect. I don’t drive and it’s near the park and just a short distance into Bangor town centre. But as Owen is getting older, we have noticed there is not enough space for his toys. We have walk-in wardrobes, but the attic is too small for storage.

If it wasn’t for the negative equity we would definitely be trading up to a bigger house, but we are looking to the future. One possibility is to extend the house as we have a large garden — it’s another option.

There are other homeowners near us in the same boat, and they too are considering extending. We will save up the money for the building work. Although we are very happy with our home and its location, we do need more room.

We will just keep paying our mortgage and saving up for what we need, and hope the house prices will go up soon. Jamie doesn’t think it is that bad, and the market will recover quite soon.

We were really worried about it until it happened, but now we know so many other people in the same situation as us.”

Buyers who bought at just the right time

High hopes — Jimmy and Maria Cano moved into a new home in Duffield Park in Belfast

Filipino nurse Jimmy Cano (35), moved into a three-bedroom semi-detached house off Belfast’s Ballygomartin Road with his wife, Maria and their three children Marty (16), Colleen (11) and Justine (7) three weeks ago

I moved to Northern Ireland six years ago because there was a need for nursing staff here. Initially I lived in accommodation at the Royal Victoria Hospital where I work, then stayed with friends and subsequently rented various houses. I have moved five times during my time here.

We decided to buy a property for family reasons and put a bid on a house in West Circular Road in July, but the sale fell through. Then we found this house in Duffield Park off the Ballygomartin Road in September and the sale was completed very quickly — in seven to eight weeks. The only delay was the mortgage as we had to apply again despite being given a home loan for the property that fell through. It took over two weeks for the mortgage to clear.

I believe we have bought at the right time. I spoke to the neighbours before we put a bid in and found out that houses locally were selling for £15,000 less than what we paid, but that was five years ago.

We paid £123,000 which I think is okay. Had we bought two years ago this house would have cost £200,000 and I would not have even considered it. We had to put a 10% deposit down so the mortgage is £111,000.

I was disappointed I couldn’t get a 100% mortgage, as the deposit was a lot of money and took up most of our savings.

Nearly all of my friends who bought houses a few years ago didn’t have to pay a deposit. However, it is a good thing as we now have some equity in the house and don’t have the high interest rates to pay.

I have been following the property stories in the news so I know house prices here have gone up 2% recently, and I really hope my house goes up in value.

The recession is worrying, although I think the situation in Northern Ireland is different to other parts of the UK. In one sense it doesn’t really matter as we are planning to stay here for a long time, it’s not like we need to sell the house really soon. We have a home and that is the most important thing. But obviously I hope the prices will go up. I think they will, but perhaps not for two years.”

Trapped by the house price crash

Niall Little (37), who runs businesses in photography and quantity surveying, lives with his wife Suzanne and their three daughters Jessica (11), Charlotte (7) and Olivia (3) in a four-bedroom detached house in Comber

I bought my house in Carnasure, Comber, five years ago from a developer for £330,000 as it was a good opportunity to own a family home. By early 2007 I wanted to emigrate to America with my family to really grow my business in another country.

At that time my house was valued at £650,000, and there was even talk of it reaching £700,000 as the market was still booming. However, the day my house went on the market another similar property also in the development went for sale at slightly less than our asking price. We had a couple of viewers, but then the drops started in September. The price started to go down in increments of £50,000 and bottomed out at £450,000.

I had already lost heart when it went under £500,000 as I needed the equity to relocate and put into a new business in America.

I just got fed up with the price dropping all the time. Even if I had just been trying to move to Belfast, a similar house there would have cost £950,000 at the time, so I needed to make money.

In addition, house prices outside Belfast fell faster than those in the city.

I took the house off the market by the end of 2007 and shelved any plans to emigrate. I decided to just ride out the decreases. Now, however, I think the market has found its natural home.

Affordability is better in Belfast now. And as all my daughters are in school in the city, I’m hopeful I could sell in the New Year and afford a move there. House prices have stabilised and I feel there will be an opportunity between now and the spring to sell at the right price. That opportunity wasn’t available a few years ago.

It would certainly help with the daily commute. Our house is still a good, sensible buy and there should still be a demand for it.

And while I wouldn’t think there will be healthy house price rises in the New Year, there should be enough demand to push prices up more than the small increases of this year.

Had to drop price to sell

Jenni Barkley (28), a public relations executive, has just sold her two-bedroom apartment in east Belfast and is trading up to a three-bedroom semi-detached house also in the area

My first home, a new-build two-bedroom, two-bathroom apartment in Lewis Square cost me £95,000 in December 2005. I liked the first floor flat as all the houses I had looked at had tiny halls and narrow stairs, and just felt claustrophic. I felt secure at the apartment as it was the first time I had lived on my own, having previously lived with my parents. I thought the price was all right and it was before the market went mad.

It was September 2007 when I decided I wanted to move. I wanted a garden, and it might sound silly but I just wanted somewhere with my own front door and my own wheelie bin. My confidence had grown after living on my own and I wanted to live in a house that didn’t have a communal front door. I just got fed up carrying everything up and down stairs all the time.

My apartment was valued at £189,950 which I thought was rather ambitious. I even said at the time ‘that’s too much’.

But there were other similar apartments for sale at that time for that price so I went along with it.

Over the next two years I dropped the price to £150,000 then £120,00 as prices started to fall. I had lots of viewers but no real offers. I think there were serious buyers among them but they just couldn’t get finance. I stopped looking at houses for myself as there was no way I was going to buy without a sale. I just didn’t want two mortgages at my age.

At one stage I did consider withdrawing the property from the market as I was fed up with people traipsing round the apartment. But then I got an offer of £110,000. Everything happened really quickly from that point and about 40 minutes later, when I looked at what I could afford, I accepted the offer.

I sold my apartment in October and just as quickly bought another house for £137,000. It took two years to sell my apartment, but I wouldn’t have bought the older property I have now which needs refurbishing, if my flat had sold quicker.

When I put my apartment up for sale I thought I would just buy another new property where everything was done.

Now having made a £15,000 profit I feel I can justify a new bathroom and kitchen at this house.

Thanks to my savings I still have the same mortgage. And hopefully I will get moved before the stamp duty holiday finishes at the end of December.