The coronavirus pandemic has been a shake up for almost every industry in the world. Arts, leisure, and food service took a serious dive, while delivery companies boomed as lockdown restrictions gave the online shopping sector a huge boost.

One sector that’s defied all expectations is the housing market. House prices have behaved entirely unpredictably, leading to record highs that no expert could have seen coming.

So how exactly have house prices changed from the start of lockdown in March 2020 to now? And what might happen next?

Northern Ireland house prices continue to steadily rise

House prices in Northern Ireland have kept up with the rising trend of the rest of the UK.

Even with the initial fall when the property market crashed in March 2020 due to lockdown, prices in Northern Ireland grew a full 5.3% from the end of 2019 to the end of 2020.

Remarkably, this growth has continued into 2021. The UK House Price Index recorded an average price in Northern Ireland of £149,178, as of May 2021 when data was last available.

Interestingly, this is a continuation of a broader trend for the Northern Irish housing market. Prices have been on the rise since 2013, and Covid accelerated rather than slowed this progress.

Of course, despite this growth, current prices are nowhere near the peak seen in 2007 when average Northern Irish homes were the most expensive in the UK, hitting an all-time high of £224,670.

Stamp Duty holiday and demand for space has driven prices up

There are a few factors that influenced the performance of the market over the past year and a half.

Firstly, Rishi Sunak’s Stamp Duty holiday can be credited for supercharging demand. The chancellor designed the tax break to boost a flailing property market, and the scheme has been very successful.

In fact, property search site Rightmove reported having their busiest day of the year on 8 July 2020 when the Stamp Duty Holiday was announced, as buyers looked to save up to £15,000 on property purchases.

The circumstances themselves also contributed greatly to this surge in demand, with lockdown having a large part to play.

As many people found themselves spending more time at home, demand for homes with gardens and more outdoor space also rose.

And, with Zoom calls making it more viable to work from home, and further away from a physical office, city dwellers fled to smaller towns and the countryside for an improved quality of life.

The Belfast Telegraph has even suggested that people living around the UK moved home to Northern Ireland, citing cheaper prices than the rest of the UK.

You can never bank on house prices falling

So, what’s next for the housing market? Will this growth continue, or will there be a decline in value once sales stuck in the pipeline complete and normal service is resumed?

In short, the answer is that it’s impossible to tell. Some experts continue to forecast growth, while others take a more cautious outlook.

Savills estate agency has forecasted 4% growth in the rest of 2021 across the UK. Meanwhile, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, believes price growth will slow as supply and demand begin to reach more of an even keel.

UK-wide prices rose a further 0.4% in May when data was last available, with the average house price having increased by 10% in 2021. This suggests that growth could continue this year.

Realistically, if you’re currently looking to buy, there’s little sense to wait for house prices to fall. The market is too unpredictable to be able to say for certain whether it’s right to wait, with expert opinions entirely split on the subject.

For first-time buyers, the outlook is even more foreboding.

According to the thinktank Resolution Foundation, a first-time buyer putting aside 5% of their income in the mid-1990s would have been able to afford a deposit on a home in around four to five years.

However, due to the growth in prices over the past three decades, that same 5% saving strategy would take 20 years to provide a deposit.

Even with a pandemic in between, the housing ladder still presents a challenge for those looking to get onto that first rung.

The fact is, the housing market is a lot like the investment market: you can try to time it, but sometimes it can be better to just take the plunge.

Is now the right time to buy for you?

If you’d like help working out whether now is the right time for you to buy in the housing market, please get in touch with us at Digney Grant.

We can give you personalised advice on what’s right for you, and help you find a mortgage deal that suits your needs.

Please call +44 (0)28 3082 8880 to find out more.

Please note:

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.