Cookstown housing market crisis report: gloom until 2020 at earliest

Property for sale in an estate agent's window in South London, Tuesday Aug 29, 2006. London has become the most expensive city in the world for

Property for sale in an estate agent's window in South London, Tuesday Aug 29, 2006. London has become the most expensive city in the world for "Up market" housing reaching 3000 pounds (US$ 5700) per square foot beating New York into second place by 300 pounds (US$570) per square foot. (AP Photo/Sang Tan)

By Anthony Quinn

A NEW report lifting the lid on the crisis in Cookstown’s housing market has revealed that prices may not return to normal until 2020 at 
the earliest.

Among the alarming findings unveiled by the Housing Executive is the fact that 3,576 households in the Cookstown District are currently unable to afford a house, in spite of a dramatic drop in prices.

The Mid Ulster Housing Market Analysis, which was undertaken by the HE to understand local market trends and identify future imbalances, shows that an entire generation of local families risks being locked out of home ownership because of the decline in the economy and cuts to the public sector.

In fact, constrained mortgage lending and the declining economy mean that 55 percent of Cookstown District couples under 40 are unable to afford their own home, a much higher figure than the Northern Ireland average of 43.7.

In addition, 32% of Cookstown households are unable to afford the average rent of a typical two-bedroom dwelling in the private sector, which is again higher than the Northern Ireland average.

The report found that the level of vacant properties in the Mid Ulster area has been consistently above the Northern Ireland average for the past decade, particularly in the rural areas.

Figures show that there are 5580 empty properties in the local area, which represents 11% of the housing stock.

The report authors also predict a rise in the number of households in housing stress, and offer a gloomy forecast for the next number of years. It said that a large number of home-owners will be trapped in negative equity for the foreseeable future.

Father of one William Montgomery from Cookstown described how and he is partner were caught in the negative equity trap.

They bought at the peak of the market out of fear that prices would rise beyond what they could afford.

“House prices were rising sharply and we felt that it we didn’t get on the housing ladder we never would”, they said.

Unfortunately the housing market slumped six months after they made their purchase, leaving them trapped in negative equity.

They said the prospect of waiting until 2020 for the market to return to normal was depressing.

“We are seeing houses in our area now selling for considerably less than we paid. It’s gutting, really. Mortgages are still as expensive, if not more so with pay cuts.

“Paying a mortgage is a big financial burden and one that affects the life choices we make.

“However, at the end of the day, it’s our home and a place to live in, rather than an investment.”

According to the authors of the report, the underlying economic conditions required to regenerate the Cookstown housing market are not yet in place and may not be so for a considerable period.

“While the public sector could have a role in stimulating the housing market, this will only have a limited effect due to expenditure cuts applied by government”, they said.

“Indeed job growth in the region is likely to be slow over the next ten years and will restrict future household growth.

“There is consistent demand for social housing within Mid Ulster HMA. The 2011 social housing need assessment identified a five-year need of approximately 217 units for Mid Ulster.

“In addition, it is anticipated that the levels of new applicants and those in housing stress will rise further if the supply of private renting fails to meet affordable demand and if government funding for further new build social housing continues to be constrained.”

The lack of economic recovery in the Mid-Ulster area was blamed upon the area’s exposure to the Republic of Ireland economy and its high share of public sector jobs, and people living on benefits, which are vulnerable to cuts.

“Overall, we judge that the economic conditions required to secure a return to stable but modest real house price growth and to secure sustained expansion in private housing construction are unlikely to reappear in the near future”, said the report.

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