The north’s residential property market has experienced a notable steadiness in the early months of this year, marking a welcome shift after a period of cooling attributed to interest rate hikes in the preceding year.
But this renewed activity comes with its own set of challenges and considerations, shaping the landscape for buyers, sellers, and landlords alike.
The latest Rics/Ulster Bank residential market survey indicated that although the number of properties coming to the market has increased at its strongest rate in over three years, demand continues to outstrip supply in many areas, leading to competitive market conditions. This imbalance underscores the pressing need for sustainable solutions in housing, a focal point for Rics as well as many other regulators and industry stakeholders.
One of the primary drivers of change in 2024 is the growing emphasis on sustainability, particularly concerning Energy Performance Ratings. With lenders increasingly prioritising properties with high energy efficiency, the market is witnessing a shift towards more eco-friendly homes.
New regulations set to take effect regarding Minimum Energy Efficiency Standards will require all rental properties in England and Wales to attain 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 reestablishment signalling a similar trajectory for landlords in the region.
The implications of these energy performance standards are multifaceted. While compliance may incur costs for property owners, it also presents an opportunity for enhanced value.
Properties boasting high energy efficiency ratings will not only align with regulatory requirements but also offer reduced running costs and potential access to favourable “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. Over the past three years, construction expenses have surged due to global factors and inflationary pressures.
This increase often results in the cost to build surpassing the market value, rendering planned developments financially unviable. Moreover, infrastructure challenges, planning delays, and the need for re-zoning exacerbate the situation in Northern Ireland.
The culmination of these factors underscores the complexity of the current property market landscape. While demand remains robust 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, is a member of the Northern Ireland regional board of the Royal Institution of Chartered Surveyors (Rics), which promotes and enforces the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure