Housing market caution fuelled by fears over Brexit

CONCERNS over Brexit are among factors contributing to caution over the future of the housing market despite an increase in prices, a report said today.

Prices rose again in February, but at a slightly lower rate than January, according to the Royal Institution of Chartered Surveyors (RICS) and Ulster Bank survey.

RICS members also said that they had lowered their expectations about the market, with sales forecasts at the lowest in five years.

However, they indicated that prices would still go up as supply would continue to be tight as there was little sign of a pick-up in instructions to sell. The north west of England and Wales were the only UK regions with higher numbers of estate agents expecting prices to go up.

The latest Northern Ireland house price index from Land and Property Services reported a standardised price of £130,482 for the last quarter of 2017 — up 4% on the same period a year before.

Sameul Dickey, RICS residential property spokesman, said: “Surveyors appear to be becoming more cautious about the market, perhaps based on some of the recent noise around the border and Brexit, as well the expectation that the Bank of England will raise interest rates.

“But this appears to be less the case regarding prices than sales activity. We’ve seen an ongoing shortage of properties coming onto the market for some time, and this doesn’t appear to have changed in the latest survey.

“This lack of supply will likely support current price levels and indeed potentially push prices higher in the months ahead.”

And Mr Dickey added it was too early to tell whether the recent caution would persist or whether it was a short-term reaction to the recent controversy over the future of the border.

Sean Murphy, managing director for personal banking at Ulster Bank, said recent figures from UK Finance showing growth in mortgage lending to first-time buyers and home movers reflected continuing trends at the bank.

But he added: “There are challenges for the market ahead — not least the lack of supply — but in our experience, owning their own home or moving house are still key goals for many people in Northern Ireland and this is likely to remain the case.”

The number of surveyors saying prices had risen in the last three months was 35% higher those saying prices had fallen.

And the data showed a fall of 2% in expectations about future sales though agreed sales had grown by around 2%.

The separate Ulster University NI quarterly house price index for the last three months of 2017 recorded an average house price of £158,285. That was an increase of 1.2% with the last quarter of 2016, but down 3.4% on the third quarter of 2017.