Things are look­ing up for north Down and ards res­i­den­tial lets

Belfast Telegraph - Business Telegraph - - News - By tom drum­goole, Part­ner at neill Es­tate agents RICS mem­ber Tom Drum­goole is a part­ner and char­tered val­u­a­tion sur­veyor at Neill Es­tate Agents

The North Down and Ards area is cur­rently ex­pe­ri­enc­ing an in­cred­i­bly buoy­ant res­i­den­tial buy to let mar­ket, with New­tow­nards and Ban­gor see­ing lev­els of de­mand for prop­er­ties not recorded since be­fore the prop­erty crash.

Good qual­ity rentals are be­ing let in a mat­ter of days. Highly sought-af­ter ar­eas such as Ban­gor West and Bal­ly­holme have seen the av­er­age rent in­crease by as much as £100 per month com­pared with just a few years ago.

Av­er­age lease pe­ri­ods are now start­ing to in­crease from a stand- ard six-month ten­ancy to one to two years which fur­ther demon­strates the strength of the sec­tor.

We have noted an in­crease in in­vestor ac­tiv­ity, with some mort­gag­ing and oth­ers us­ing sav­ings to fund pur­chases. With in­ter­est rates still low, in­vest­ment re­turns of around 6% are typ­i­cal and at­trac­tive in ad­di­tion to cap­i­tal growth.

Re­cently we have also seen grow­ing de­mand from buy­ers seek­ing to se­cure unique prop­er­ties such as those with sea views, pe­riod fea­tures or close to town cen­tres. Th­ese are of­ten bought to rent out on a short-term ba­sis, for ex­am­ple to the hol­i­day mar­ket.

While the re­turn on this type of short-term let­ting may be sub­stan­tial this should be weighed up against the in­creased risk, work­load and wear and tear to the prop­erty.

The res­i­den­tial sec­tor in the North Down and Ards area is also per­form­ing well. This is in line with the lat­est find­ings of the RICS and Ul­ster Bank Res­i­den­tial Sur­vey which showed that the bal­ance of sur­vey­ors say­ing that prices rose in the past three months was sig­nif­i­cantly higher in North­ern Ire­land than the UK av­er­age.

There seems to be a trend for pur­chasers mov­ing away from the ‘fixer-up­pers’, pre­fer­ring new or re­cently ren­o­vated prop­er­ties. As the cost of build­ing, labour and ma­te­ri­als con­tin­ues to rise we pre­dict this trend to con­tinue.

Our own sur­vey divi­sion has re­ported that some po­ten­tial pur­chasers are very wary of hav­ing to carry out im­prove­ment or up­grad­ing works and are opt­ing to with­draw from the pur­chase rather than rene­go­ti­at­ing the price to re­flect the cost and in­con­ve­nience of the works.

The num­ber of new build prop­er­ties is in­creas­ing and all are com­ing with a turnkey fin­ish but there is still strong de­mand for ex­ist­ing hous­ing stock. New de­vel­op­ments of­ten tend to be built on the out­skirts of towns and fur­ther away from schools, shops and other ameni­ties. Other buy­ers favour prop­er­ties close to th­ese ameni­ties, so all in all a rel­a­tively bal­anced mar­ket is main­tained.

The com­mer­cial sec­tor in our area is see­ing more chal­lenges. Shorter term leases, break clauses and land­lord in­cen­tives are the order of the day in most pro­vin­cial towns in­clud­ing Ban­gor and New­tow­nards. Rates, de­spite small busi­ness re­lief, still can be a hur­dle to small start ups.

As is the trend across North­ern Ire­land we are ob­serv­ing that re­tail busi­nesses are slowly on the de­cline and that ser­vice-based sec­tors are now mov­ing into town cen­tre lo­ca­tions. This trend is be­ing helped by fall­ing rents.

In­ter­est­ingly, there is cur­rently a strong de­mand for de­vel­op­ment land and sites, es­pe­cially those with plan­ning per­mis­sion. We are av­er­ag­ing two or three calls a day from builders and de­vel­op­ers seek­ing to re-en­ter the mar­ket­place, so there is cer­tainly a level of in­ter­est there which we haven’t seen since be­fore 2008.

Through­out the po­lit­i­cal, eco­nomic and so­cial chal­lenges over the last few years, agri­cul­tural land val­ues have slowly but surely im­proved. It ap­pears to be the only prop­erty sec­tor which has avoided any im­pact from the his­toric prop­erty down­turn.

As yet, Brexit does not ap­pear to be hav­ing any neg­a­tive im­pact on land val­ues in the North Down and Ards ar­eas. Cur­rently de­mand re­mains high and sup­ply low and as long as that con­tin­ues the land mar­ket will re­main sta­ble.

Like the rest of our col­leagues work­ing across North­ern Ire­land we know that it is early days in the with­drawal process and only time will tell what the true im­pact of leav­ing the EU will be on each prop­erty sec­tor.

The buy to let mar­ket in places like Ban­gor is thriv­ing

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