In an exclusive interview with Helmut Elstner, founder of The Mortgage Clinic, we delve into the pressing question facing many Northern Ireland residents in 2024: Should you rent or buy?
Helmut explains that “ Northern Ireland’s housing market has changed considerably in recent years.” He notes that “ while choosing between renting and buying is a personal decision, there are various factors to weigh in today’s environment.”
Helmut’s Thoughts on the Current Rental Market in Northern Ireland
Helmut observes that rental prices in Northern Ireland have risen sharply in recent times. “Recent figures indicate a rapid increase in rents, with the average monthly rent now at £886, marking an 8.5% rise compared to last year.”
He highlights the growing supply-demand imbalance in the rental market. “This is evident in the high volume of enquiries per rental listing. Over the past three months, PropertyPal has reported an average of 66 enquiries per advertised property.”
Helmut also notes that the rental growth isn’t consistent across the region. “Belfast, in particular, has seen notable increases, with the average rent in the Belfast City Council Area climbing 7.4% to £1,019 in the first half of 2024. Other regions have experienced even higher annual growth, exceeding 10% in some cases.”
Looking ahead, Helmut urges caution. “Although there has been some progress in addressing the supply-demand gap, it remains significant. A substantial addition of new rental properties is needed to bring rent increases closer to pre-pandemic levels.”
He emphasises the need to stay well-informed in the current market. “Whether you’re a landlord or tenant, staying updated on these trends and seeking professional guidance is crucial for navigating the complexities of Northern Ireland’s rental landscape.”
Key Areas in Northern Ireland Most Impacted by Rental Market Trends
Recent data reveals that certain regions in Northern Ireland have been more significantly affected by rental market shifts:
Belfast and Surrounding Areas
Belfast remains a focal point for rental activity:
- The Belfast City Council Area experienced a 7.4% rise in average monthly rents, reaching £1,019 in the first half of 2024.
- Over 29% of lettings in Belfast fall into the higher rent bracket, exceeding £1,100.
Mid & East Antrim
This region has seen the most substantial changes:
- Mid & East Antrim reported the largest annual rent increase, at 16.1%, with the average rent now standing at £742 per month.
- An earlier report indicated a 11.7% rise in rents over six months, bringing the average to £670.
Ards & North Down
Ards & North Down is seeing increasing pressure in the rental market, following closely behind Belfast. While rent increases are being felt across Northern Ireland, these regions are particularly impacted by the ongoing rental market trends.
Helmut’s Thoughts on the Current Buying Market in Northern Ireland
Helmut enthusiastically highlights the recent steadiness in Northern Ireland’s housing market. “We’re seeing some real consistency now—property prices have levelled off with a solid 3.0% annual growth rate, and new listings are up by 1.0%,” he shares. With a smile, he adds, “The average property price, excluding new builds, is now sitting at £206,600, which reflects that steady 3.0% yearly rise, plus a 0.9% bump from the last quarter. It’s a good sign for stability in the market.”
Regarding market activity, Helmut points out that the average time for a property to move to ‘sale agreed’ is now 42 days, a slight improvement from 43 days in the same quarter last year. There were 6,343 properties agreed for sale in Q2 2024, a 4.0% decline compared to the same period in 2023.
Helmut remains optimistic about the future of mortgage rates. “As we move further into 2024, the trends we’re seeing in mortgage rates are really promising—great news for both homebuyers and those looking to refinance,” he says with confidence. He anticipates that the average 5-year fixed mortgage rate will drop to around 3.82% by year’s end, a notable decrease from 4.86% in late 2023.
Looking ahead, Helmut remains cautiously optimistic, acknowledging that high mortgage rates and uncertainty around the UK general election have tempered market activity. However, with inflation returning to the Bank of England’s target, he anticipates potential interest rate cuts, which could help invigorate the market.
He stresses the importance of staying informed and seeking expert guidance in the current market. “At The Mortgage Clinic in Belfast, we’re dedicated to helping our clients navigate their financial decisions with confidence,” he adds.
How Do Property Prices in Northern Ireland Compare to Other UK Regions?
Helmut, well-regarded for his keen insights into the housing market, shared his perspective on Northern Ireland’s current standing.
“Northern Ireland’s property market is really setting itself apart from the rest of the UK,” Helmut remarked, his excitement clear. “The average house price in Q2 2024 is £185,000. At first glance, that might not seem overly impressive, but it’s the wider context that makes it truly stand out.”
He explained that this figure represents a 6.4% year-on-year increase, outpacing growth in all other UK regions. “It’s a delicate balance,” he noted, “offering both affordability and solid growth potential—something that’s becoming increasingly rare in today’s market.”
When comparing Northern Ireland to other regions, Helmut offered important context. “In England, the average house price is about £306,000, and in London, it’s a staggering £523,000. Even Wales and Scotland, with averages of £218,000 and £199,000, don’t provide the same value you’ll find in Northern Ireland,” he pointed out.
Despite his optimism, Helmut issued a word of caution. “While this growth benefits homeowners and investors, it could create difficulties for first-time buyers if wages don’t keep up,” he warned.
Looking ahead, Helmut remained cautiously optimistic. “Will this growth continue at the same rate? That’s difficult to predict. However, at this moment, Northern Ireland presents a unique opportunity within the UK housing market. It’s a place where your money stretches further, with real potential for future appreciation.”
“For those considering buying or investing, Northern Ireland should be high on the list. It’s not just about the current prices—it’s about the potential. And right now, that potential is substantial.”
Navigating the Rent vs. Buy Decision in Northern Ireland
“The choice between renting and buying in Northern Ireland has definitely become trickier in 2024,” Helmut remarks, with a thoughtful nod. “Both markets are heading in different directions, and there are some key trends that anyone thinking about homeownership really needs to weigh carefully.”
He points out the growing competitiveness of the rental market. “Rents have increased significantly, with the average now at £871 per month, a 10% rise over the past year. This puts pressure on renters, though it’s important to remember that renting still provides flexibility, which can be a key advantage in today’s unpredictable economic climate.”
On the homebuying front, Helmut sees promising developments. “The average property price in Northern Ireland is now £206,600, reflecting a 3% annual increase. While this growth is steady, it hasn’t kept pace with the sharp rise in rents, which could make buying a more attractive option for those who can secure a mortgage.”
He emphasises the critical role mortgage rates play in this decision. “Mortgage rates are trending in a positive direction as we move through 2024. We anticipate that the average 5-year fixed rate will drop to around 3.82% by year-end, down from 4.86% in late 2023. This shift could make homeownership more affordable for many buyers.”
However, Helmut cautions that the decision isn’t straightforward. “Buying a home does allow you to build equity, but it comes with significant upfront costs and long-term commitments. Renters avoid these challenges but miss out on the potential for property value appreciation.”
He also points out the impact of regional differences. “For instance, Mid & East Antrim has seen the steepest rent increases. Local market conditions play a crucial role in determining whether renting or buying is the better option, so it’s important to consider these factors carefully.”
Helmut concludes with practical advice. “Deciding between renting and buying in 2024 depends on your personal circumstances, financial security, and long-term objectives. At The Mortgage Clinic, we encourage a detailed evaluation of your finances, future plans, and the local market before making this important decision.”
