Ireland: Escape into the wild west

The opportunity for holiday-let income still attracts investors to this rugged paradise
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Estate agents may lure second home buyers with increasingly far-flung destinations, but there remains one get-away-from-it-all location literally on our doorstep - Ireland.

It may lack the glamour of the Caribbean, but it is scarcely an hour from any UK airport, boasts low crime rates and beautiful scenery, and for hard-nosed investors it still gives a good return.

The market is generally buoyant - prices rose on average 11 per cent each year from 2001 to 2004. In the five months to December they rose 5.4 per cent, taking the whole-year figure to a respectable 8 per cent, according to the Permanent TSB house price index, the leading barometer of the Irish property market.

Holiday home-owners have made even more striking gains in recent years, but the very best bargains for British buyers have now long gone.

The number of buyers from mainland Europe has dropped as prices have risen - a €250,000 house bought in 2002 could be worth €700,000 now. Australians, Hong Kong residents, Canadians and Americans were also big buyers in Ireland, especially in coastal areas.

But now well-heeled buyers from Dublin and Cork dominate much of the second home market, accompanied by Britons spending the equity from their principal homes.

Whereas much of Britain's rural landscape is now just a slightly less dense version of urban life, Ireland has retained a much wider cultural and geographical division between big cities like Dublin or Cork and much of the rest of its land.

There may be a massive house-building programme going on in Ireland - land has been zoned for 330,000 new homes, interest rates remain very low and Ireland's Central Bank estimates up to 15 per cent of the workforce may be employed directly in construction - but most of this expansion is in or near urban areas.

"There are still undiscovered areas. Most are on the western coast in County Clare and County Donegal. There are also still very rural areas in the western edges of County Cork and County Kerry which are at least two hours drive to the nearest airport," says Stephen Jeffrey of The Property Finders.

He says there are two markets for Britons wanting to buy into "the real rural Ireland". The first consists of those who have a budget of €300,000 or more, who want to be near the coast and see the sea, even if the property is on a hillside a mile inland.

"With so many miles of coastline in County Cork and County Kerry, there's always a choice of property available from €250,000 upwards. This would get you a detached, hillside 30-year-old bungalow in need of modernisation with sea views 500 yards away.

"Restored farmhouses or cottages with distant sea views start from about €300,000 and rising, according to their proximity to the sea," says Jeffrey.

The second market is for those nearing retirement or on a stricter budget, for which Jeffrey recommends north-west Cork and up to the Kerry border.

He says it is possible to get three-bedroom detached cottages with more than an acre of land and very good rural views for €170,000 - and just 90 minutes drive from Cork or Shannon airports. Larger properties, or ones slightly closer to the airports, are available in this area from €200,000.

The potential for holiday let income is also good. The West Cork area alone attracts about 1.5m visitors a year and a spokesman for Hamilton Osborne King, one of the country's largest estate agents, says the demand for rental cottages generally exceeds supply.

"Because many foreign owners are well off, they tend not to let out their properties. Those that do can sometimes make a killing," says an HOK spokesman.

For the super rich, of course, total privacy is still attainable in Ireland, where there are still large estates with plenty of acreage, especially around County Kerry, where properties can hit €5m.

But this is one of the few overseas locations where you don't need a fortune to get away from the crowds, or a wasted day of your holiday just to get there.

And you cannot say that about many places - even Barbados and Florida.