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Northern Ireland


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beer.gifOut of 1756 hits there have only been 50 posts....does anyone else out there have an opinion?

I am guessing that alot of people read this in total disbelief of the reports of 30% rises in the last year and then discover it to be true... at which point what can you say really!?

To follow the topic - I have seen alot of local news articles. Almost everything seems to suggest that in NI we are spending more on absolutely everything! I dont know if this is true, if it is, the trouble may be of shocking proportion when it comes. However I am more inclined to believe alot of our local stories are nothing more than questionable anecdote.

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just out of curiosity, have you ever been to NI?

I'm from there

And my opinion if the property market there has not changed - prices are too high and unless you were planning of buying in the North to work in the South (where you can get well paid jobs to pay the mortgage) any buyer is likely to either see the value of their house dropping

Since i am not in NI at the minute can anyone give me the yield i could expect from buying a property in Belfast and letting it out.

I've heard that yields are around 3-4%.

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Since i am not in NI at the minute can anyone give me the yield i could expect from buying a property in Belfast and letting it out.

I've heard that yields are around 3-4%.

I cant be sure about belfast because it is a silly place at the moment. However, just outside the yields cannot be good. Mortagage repayments (IO) are significantly higher than rent... it wouldnt be unusual to have a rental payment of £400 on a property which would cost £700+ on an IO mortgage...

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Donall,

I posted recently that I knew of someone subsidising their btl mortgage by £200 a month and this is just outside Belfast in a residential area. Rents in the city would be similar to what he is charging.

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beer.gifOut of 1756 hits there have only been 50 posts....does anyone else out there have an opinion?

Might as well stop lurking....

I am no economist but my fear is that the house price crash might come at the expense of the economy in general. I can't see how the bubble will burst in an isolated fashion without leading to a recession. I have lived through recessions and it ain't pretty. So what I would hope for is a decrease in real terms such that the rate of increase is slower than inflation. What I believe will happen is that the properties owned by the Irish will be dumped if they have a crash thus flooding the market with houses, leading to a crash here and a recession affecting the whole island.

That said, the evidence on the ground is different. Houses that have sat empty for years are being redeveloped. The 'diaspora' are returning. The Troubles are over.

So although I find it hard to believe that this over-inflation of house prices will continue, I see no signs of an abatement yet.

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Welcome Peacedividend,

I fear your point of view could be spot on. The overall economy appears to continue to defy gravity. There does seem to be evidence to suggest a slow down. I do feel the HP correction will come but when is the question. The NI economy is much more fragile than the rest of the UK and that of the south which would also suggest the correction here may be much more severe.

The overall outlook here is pretty uncertain I would much rather see a healthy HP correctioon without a recession but as you say one may not happen without the other.

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  • 2 weeks later...

Just a thought perhaps to help convince others....

At current growth (30%) we will be paying 3 million for an average house in 10 years. Does anyone believe that? I didnt think so! Ok - but prices will continue to grow you say? Ok I'll play along a while. They will return to inflationary growth or well lets be more conservative, they will grow at the same rate as the national average. What is that? 5-7% outside of london? Ok again. So now to get there our growth must slow by almost 25%! But 25% is a long way... isnt there an error associated with that!? If we can slow by 25%, why shouldnt we slow by 35%?

Simple cold fact is that the NI market must slow dramatically within a relatively short time because we cannot sustain a 30% yoy growth. Anyone who accepts that we must slow dramatically but believes we cannot go beyond a totally arbitrary level is a numpty.

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Just a thought perhaps to help convince others....

At current growth (30%) we will be paying 3 million for an average house in 10 years. Does anyone believe that?

Maybe not 3 million :) But people would have laughed 10 years ago if they saw prices today. Inflation is a horrible thing sometimes.

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Maybe not 3 million :) But people would have laughed 10 years ago if they saw prices today. Inflation is a horrible thing sometimes.

The 3 million is about a 15 times increase... nowhere in the UK has seen anything like that much in the last 10 years. I would think that a doubling or trippling in the next 10 years would be the very very most possible. So we definitely have to have a serious slowing in the market.

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I presume that once price inflation slows people who went into BTL on I/O setups will want to cash in their moneyboxes.

I imagine you to be correct. But for this to happen, the market would have to slow by 20-25%. Do you not think that a glut of BTL property right on the back of a 25% slowdown could lead to more slowdown?

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As far as I can tell it has mostly been caused by lax lending, ie. remortgaging on existing houses

that were bought years ago and i/o "deals", so I think once the banks tighten up

on that then who is going to have the cash to buy these overprice boxes anyway?

Certainly not wage-earners.

What's the rental market like at the moment? Is it difficult to find somewhere to rent? By

that I mean if you are looking at a rental house are you competing with other people to

get it?

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What's the rental market like at the moment? Is it difficult to find somewhere to rent? By

that I mean if you are looking at a rental house are you competing with other people to

get it?

Very much so in my experience: with regard to Antrim there is a glut of potential renters at the mo, you could let your shed out if you wanted too!!

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Strangely enough my experience in Belfast is that there are an enormous number of properties available for rent. Towards Bangor there are even more.

The observation of there being huge demand for purchase plus huge demand for rental implies that there is a really huge number of extra people looking for accomodation - are we going to blame the immigrants? I tend not to think so because several months close observation has indicated that whilst prices for purchasing are rocketing, the number of available rental properties is doing likewise.

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wonder how long the new BTLers will keep subsidising their I/O repayments before they catch on that they'd be better off

doing something else with the leftover cash.

Probably quite a while, if they were stupid enough to get into it in the first place without pouring over the sums.

At this point capital gain is probably about well over £1k per week for a typical BTL property. The bears think this is unsustainable but the bulls in general will do little to admit this because it results in them having to accept the very same reasons they shoot down as being a precursor to a nationwide collapse. So you are finding that those in NI believe the general bullish view. Interestingly enough, I have seen very little in the way of educated bullish discussion of NI. Yes it is growing fantastically - but it is one market where the usual bullish opinions simply do not stand up.

For instance - NI WILL slow down. But why? We are getting loads of immigrants, loads of external investment and no shortage of money available to borrow. Those are typical reasons to suggest growth will continue unhindered. But inspite of this, we have to slow down. It simply must be because of affordability. But to admit this then laughs in the face of the many comments which are made by bulls indicating that affordability is not a deciding factor...

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In the past most people in a half-decent job had the prospect of saving up and buying their own house in NI.

Now even people in well-paid jobs haven't got this prospect anymore as far as I can see. And, who wants to struggle financially most of their life just to pay for a cramped overpriced box of bricks anyway.

I suppose one theory that could explain a slowdown without an actual crash is where the balance of home ownership now shifts to a different and smaller subset of the population and that renting, rather than buying, becomes the norm for most people.

Isn't this the situation on the continent, where renting is much cheaper than buying and it makes more financial sense to rent?

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Isn't this the situation on the continent, where renting is much cheaper than buying and it makes more financial sense to rent?

Yup, right on the mark. However (I am always looking counter arguements, I am not meaning to seem rude!) much of the property on the continent is let out by an individual who owns it or is at least close. Here, a good lot of property is heavily mortgaged. To have the lower rents the owner would have to subsidise the mortgage enormously in many cases which means that BTL would become rather unprofitable...

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