Brits benefit from price collapse over the Irish Sea
Plummeting house values and the pound's strength has attracted UK buyers to Ireland, reports Richard Way
Sunday 21 October 2012
Brits with a soft spot for the Emerald Isle and migrants ready to move back home are taking advantage of rock bottom property prices and the weaker euro to snap up bargain homes in Ireland, the likes of which most could never afford in the UK.
Property values in Ireland are deemed to have bottomed out this year after crashing by 50 per cent or more from the market's peak in 2007. By the first half of 2012, the price of a dream cottage in the Irish countryside grew increasingly attractive to UK buyers thanks to a fall in strength of the euro against sterling.
"Old farmhouses with land are especially good value," says Mary Cotter, who runs estate agency Irish Rural Homes in West Cork. "You can sell your terraced home in the UK and with the proceeds over here buy yourself a home in good condition with an acre of land and views, typically for about €150,000 (£122,000). We've seen sales to British buyers increase by around 20 per cent year on year."
Sterling gained steadily against the euro in the first half of 2012, from around £1/€1.19 in January to over €1.28 towards the end of July. "The difference in the rate during the first seven months of the year made a €150,000 property nearly £9,000 cheaper to a sterling buyer," says Alex Willson of currency specialist Smart Currency Exchange, who is working with an increasing numbers of agents to help UK buyers save money on currency transfers.
The coast from Rosslare in Wexford, with its ferry service from Fishguard and Pembroke in Wales, down to the south-western tip of West Cork is popular for its stunning coastal scenery, access from the UK – via Cork airport as well as ferry, and milder climate, thanks to the Atlantic Gulf Stream. Property there rocketed during the boom years driven by wealthy foreigners, or "blow-ins", buying coastal bolt-holes in areas such as Kinsale, Schull, Bantry Bay and the Sheep's Head Peninsula.
Away from the coast and in stark contrast, Kieron Knight from Newcastle is about to complete on a two-bedroom stone cottage with an acre of land a few miles west of Macroom. He's paying just €60,000 for the property, plus €2,000 in buying costs, but plans to spend around €100,000 restoring and extending it. The finished product will initially be a second home to enjoy with wife Susan and their two children, but at some point they'd like to move there for the better way of life.
"Susan is Irish so we've thought about moving to Ireland for a long time," says Kieron, who owns a detergent manufacturing company. "Before the property crash we couldn't afford to buy and then after the downturn kicked in the exchange rate went close to parity, so we waited until we felt the time was just right."
UK buyers are discovering deals can get even better in lesser trodden areas of Ireland, particularly in the central Border Region. Here, in the town of Ballinamore in County Leitrim, agent Gordon Hughes has seen sales to UK buyers surge to around 70 per cent of his total business this year.
"The area has the lowest property prices nationally and lowest population," says Mr Hughes. "The majority of properties in this area are for sale below their build cost, such as four-bedroom bungalows of around 2,000 sqft in excellent condition and on an acre of land, which are selling for around €150,000. At the peak of the market in 2007 these would have sold for approximately €300,000."
Aside from price, Leitrim and neighbouring Cavan and Rosscommon counties, are attractive because of their proximity to Northern Ireland, including the town of Enniskillen, says Mr Hughes. It means British homeowners here are only a short drive from familiar UK shops, the NHS system – Enniskillen has a new hospital – and British banks, which is especially useful for residents, or part-time residents, who prefer to leave savings or assets in sterling, given the uncertainty of the euro.
The area's lakes and canals, including the Shannon-Erne Waterway, are another undiscovered secret, although not to keen fisherman Steve Taylor from East Sussex, who this year bought a two-bedroom stone cottage just outside Ballinamore for around €119,000.
"I've been going to Leitrim for 25 years for the fishing – you can have a lake to yourself all day there," says 63-year-old Steve. "In April this year, my wife Stacey and I decided to look at the possibility of buying a cottage as a second home.
"We knew that since the crash, prices had fallen dramatically and that 20 per cent of property was unoccupied. Prices had reached a level that enabled us to buy in cash and locals I know in the area were telling me now is the time to buy. Owning our cottage is much more fun than having the slowly diminishing ISAs and savings it has replaced."
The Taylors' property sits on a 1.25 acre plot, has views across a canal and fields to the Iron Mountains, and, having been restored in the past 10 years, needs no work doing to it.
"We were concerned we might cause resentment by taking advantage of the plight of the local people, but everyone told us they'd rather have houses properly maintained and new money coming into the economy than see them empty," added Steve.
Buyers in the central Border Region aren't just second homeowners – a number move permanently. James Spring of agency Peter Donohoe & Son Real Estate Alliance, says: "Now we see couples with young children, people looking for a self-sufficient lifestyle and older couples retiring or wanting to be nearer children and grandchildren. You also get people who were born in Ireland, but have lived in the UK most of their life, returning 'home'."
Susan Evans, 59 and from Bridgend, is typical of the returning migrant. Born in Dublin but having lived in the UK since her teens, she is in the process of buying a three-bed house six miles from Ballinamore with her partner Raymond. Susan is already retired from the South Wales Police Dog and Mounted Section and as soon as it's financially viable, the couple will relocate to Ireland.
With around 1,100sqft of living space and a garden, Susan's property is a bank repossession, which might explain the purchase price – just €69,000.
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