Residential Property Market in the North: Challenges and Considerations for Buyers, Sellers, and Landlords
The north’s residential property market is experiencing a revival in the early months of this year, bringing a welcome shift after a period of cooling due to interest rate hikes in the previous year. However, this resurgence comes with its own set of challenges and considerations, shaping the landscape for buyers, sellers, and landlords alike.
According to the latest Rics/Ulster Bank residential market survey, there has been a notable increase in the number of properties coming to the market, the strongest rate in over three years. Despite this, demand continues to outstrip supply in many areas, leading to competitive market conditions. This imbalance highlights the urgent need for sustainable solutions in housing, a focal point for Rics and many other regulators and industry stakeholders.
One of the major catalysts for change in 2024 is the growing emphasis on sustainability, particularly concerning Energy Performance Ratings. Lenders are increasingly favoring properties with high energy efficiency, leading to a shift towards more eco-friendly homes in the market.
New regulations set to take effect regarding Minimum Energy Efficiency Standards will require all rental properties in England and Wales to achieve an EPC rating of C or above from 2025, with non-compliance potentially resulting in penalties of up to £30,000. This regulatory framework is expected to extend to Northern Ireland, with Stormont’s reinstatement signaling a similar trajectory for landlords in the region.
The implications of these energy performance standards are multi-faceted. While compliance may bring about costs for property owners, it also presents an opportunity for increased value. Properties with high energy efficiency ratings not only meet regulatory requirements but also offer reduced running costs and potential access to favorable “green mortgage” rates, appealing to environmentally conscious buyers and investors.
However, alongside sustainability concerns, the property market faces challenges stemming from rising building costs and a skills shortage. Construction expenses have surged over the past three years due to global factors and inflationary pressures, often surpassing the market value and rendering planned developments financially unviable. Infrastructure challenges, planning delays, and the need for re-zoning further compound the situation in Northern Ireland.
The culmination of these factors underscores the complexity of the current property market landscape. While demand remains strong and sustainability emerges as a key consideration, challenges such as escalating building costs and regulatory compliance loom large.
Addressing these issues will require collaboration among policymakers, industry stakeholders, and communities to foster a resilient and inclusive housing market that meets the needs of both present and future generations. Garrett O’Hare, managing director of Bradley NI and a member of the Northern Ireland regional board of Rics, emphasizes the importance of promoting and enforcing the highest professional qualifications and standards in the development and management of land, real estate, construction, and infrastructure.
