Buy to Let in Northern Ireland

The Northern Ireland housing market was low with the fear of terrorism. Though this reason is no longer the problem Belfast’s housing market is still not rising. There are few first time buyers or buy to let investors as prices have risen 50% in the last year.

With these prices landlords cannot get the necessary rental yields and this is also frustrating to possible first time buyers needing to live in the city as they rely on rented accommodation until they can afford a mortgage.

The average wage just outside Belfast is £15,000 but a small bungalow would need a 15% deposit and cost around £250,000.

Obviously raising the rents would be the thing to do but with these wages people would be unable to pay. A two bed end terrace in Belfast offers are from £275,000 requiring a 15% deposit of £41,250 and leaving a £233,750 mortgage. With a 5.5% interest rate, repayments would be around £1071pm. Rental on this type of property would be a maximum of £550pm therefore not a profitable deal.

Houses were selling well last year but now the market has slowed to a worrying level. Those that bought property before the rises have made large profits but if their mortgages were tracker they would now not be getting much profit from their rental yields.

Many buy to let landlords are choosing to buy properties over in Liverpool, Manchester and Newcastle where prices for a three bed terraced house are about half of those in Ireland.

Because the prices have risen so high above the wages it means that landlords are unable to raise their rents to cover their mortgage repayment shortfalls. As with many areas of the UK the shortage of housing is something that must be heeded.

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