Double, double, toil and trouble. When storm clouds gather, it’s not unusual for those in their path to flee. Three years on from the referendum on Brexit, the portents for the UK are dark. House prices are wavering, the pound has plummeted and living costs are on the up. But with mounting fears of a no-deal Brexit, are Britain’s Irish pointing for home?
The UK has always been a major destination for the Irish. Britain’s Office of National Statistics (ONS) puts the Irish-born population of the UK at 380,000. Many were the migrating birds blown off course to new habitats by recession at home. But migrating birds are attuned to the weather. With the economic barometer dropping across the channel and fairer times here, more are now on a flight path home.
The number of immigrants swapping the UK for Ireland has steadily increased since the UK voted to leave the EU. While recent CSO figures show a marginal decrease, the number of immigrants arriving from the UK stood at 19,700 in the 12 months to April 2019. It's no wonder the property market is feeling the trend.
The bit that surprised us was that about half of them I would say had no Irish heritage
“We’re finding on a daily basis more and more enquiries coming from the UK, mainly from London but also from Manchester and Birmingham and indeed cities such as Nottingham and Bristol,” says Rena O’Kelly, residential director at Sherry FitzGerald. UK web traffic to the estate agent’s site has increased by 30 per cent since July.
Managing director of property website MyHome.ie Angela Keegan notes a similar trend, with a 9 per cent increase in the number of UK-based visitors to the site since July.
Anecdotes from Sherry FitzGerald’s regional branches of Brexit-driven activity abound. One trend is “future-buying”. “These are young couples doing well in the UK who are now more confident of a better future for their children in Ireland so are buying now with a view to returning once their children start secondary school,” says O’Kelly.
“We had an example today of a couple – Irish wife and English husband – who hadn’t planned to move here but are now disillusioned with Brexit and are looking at €1 million-plus houses with a view to a move.”
Sherry FitzGerald estimates that as many as one in three buyers next year in certain parts of Ireland will come from the UK. The estate agent has also had approaches from multinationals in London looking to increase their operations in Dublin in recent weeks. “The impact on housing demand for Ireland is likely to be more significant than the authorities currently anticipate,” O’Kelly says.
James Butler at Savills is also seeing the trend. He specialises in the sale of country houses, defined as "unique, aspirational properties situated in the country". Last year, a foreign national bought one in three properties he sold.
“We have seen an increase in the number of inquiries, viewings and bids coming from the UK, principally London and particularly from parties with a financial background,” he says. Brexit is a force, and Ireland’s economy has benefited to a degree, but not all comers have an Irish connection.
He mentions a notable spike from mid-November 2018 to before Westminster’s Brexit withdrawal deal vote in March. “During that time, we sold a number of properties to UK-based people who were specifically buying because of Brexit. The bit that surprised us was that about half of them I would say had no Irish heritage.”
He says some buyers have now paused, awaiting clarity from the October “leave” deadline. “If and when that clarity comes, we’ll see more action again and potentially more people coming over.”
Whether it's a bolthole, a business or a base for family, there's something for most budgets. Properties currently on his books include a pretty cottage on a white sandy beach with a water view in Donegal with bidding at €455,000 to a 354-acre stud farm priced at more than €7 million.
Mortgage brokers are also picking up on the Brexit buying trend. "We have seen a very steady flow of business from that type of customer," says Brokers Ireland member Michael Dowling of Dowling Financial.
While Brexit has dampened the value of the pound, buyers are not dissuaded. “There’s a steady stream. This week alone there have been two inquiries from the UK that will convert into mortgages.”
So who is buying? “Most people I deal with would have some connection with Ireland. One is an Irish passport-holder and is from the particular district they are buying in and one isn’t.” They are looking in the €400,000 to €500,000 bracket and higher, with two transacting at the moment at €675,000 and €1 million, he says.
Some buyers are creating options rather than making an immediate move. He sees a recurring trend of buyers seeking out houses to use as a holiday home that they may ultimately retire to. “More would be buying outside of Dublin or the main urban locations. It’s Wexford, Waterford, Cork, Kerry, Galway – typical holiday type locations.”
Non-residents seeking a mortgage here can find it tough, says Dowling. “Quite a number of banks won’t lend full stop,” he says. “AIB and Ulster Bank are the only banks that will consider applications from UK residents.”
As both banks lend only 65 per cent of the purchase price, buyers will need a substantial deposit, something UK-based buyers tend to have. “They would typically have done very well in the UK. One of the applications I’m doing at the moment, their income is £1.3 million a year.”
All of the guys that left when we had our big recession never really came back
Some could pay cash outright while other will choose the mortgage route. “AIB offers the same interest rates for a holiday home or investment property as they would to an Irish resident taking out a mortgage,” he says.
Dowling advises applicants to gather the usual paper trail of bank statements on all accounts, details of mortgage, loan and credit card repayments and evidence of salary. Applicants will also need a UK credit report from a provider such as Experian.
Of course not all of those moving back will want to buy. Brian Carey of Carey Architects, based in Tarbert, Co Kerry, has had some commissions from returners. Frequent flights from Kerry and Shannon mean workers there have long commuted on Monday morning red-eye flights for a sterling salary. This connectivity makes it an attractive base for those planning a move.
Carey says those planning to build should give themselves a two-year horizon. “Realistically you are talking two years at least between making the decision, appointing an architect and designing your house, getting planning permission, tendering it, building it – we would say at least two years from when they knock on our door to when they put the key in their own door.”
Securing planning permission is the first hurdle. “One of the most important things is the selection of a site,” he says. If your heart is set on a rural location, you will need to demonstrate a housing need. A qualified professional like an architect is best placed to advise on the local council’s guidelines. “If it is a site that is zoned within a town or village, somewhere it can be connected to public services, they will be far happier.”
Of those with funds to build, Carey says the depreciation of the pound coupled with rising building costs means their sterling is stretched. “The cost to build has skyrocketed in recent years,” he warns.
A nationwide shortage of trades is an issue. They are not available to build homes for returning emigrants because, well, they emigrated. “All of the guys that left when we had our big recession never really came back,” Carey says. Block-layers in particular are few and far between. “They used to charge a euro a block, now they are charging €1.40.”
“A client looking to build a four-bedroom rural house will need to have upwards of a €350,000 budget. And that’s at the lower end.”
Room at the inn
Whether buying or building, those looking to a life in Ireland after Brexit can find further advice online. In August, Minister of State for the Diaspora Ciarán Cannon launched "Returning to Ireland", a new online information portal for Irish emigrants seeking to move home. While housing availability for all citizens remains a political hot potato, the message to returning emigrants is one of céad míle fáilte and shelter from the storm.