The Irish may be leaving, but the English are coming, with the change of government helping to stir up interest among UK investors

WITH A reported 1,000 people a week leaving Ireland to find work, an influx of Irish workers is on the way back to London. It’s not quite the 1980s again, when scores of Irish construction workers would wait for the nod outside the Crown pub in Cricklewood, but the numbers are high.

Today’s Irish professionals come with excellent project experience, are competitive on price and there are plenty of them. A £6 million residential conversion that we are currently developing in South Kensington is a case in point: we have a quantity surveyor from Galway, a Mayo foreman and build team, and a Dublin structural engineer.

But there is a broader interest in London in what is happening in Ireland too. Explaining how Nama works to London-based investors last weekend was not easy, but believe me, they wanted to know. The London property community has a particular interest in the status of the strategic sites in London that are now owned by the state-owned Irish banks. The news of the Battersea Power station planning consent last month served as a reminder of the heady days of the Irish acquisition boom pre-2007. Thousands of residential investment properties were bought by Irish investors in London between 1999 and 2007. After the crash, many assumed these would be dumped onto the market, but this hasn’t happened. Low interest rates and strong yields have enabled many to hold on to their units, although this may change with pending interest rate increases.

Of course, some investors have had to dispose of their prime London investment stock and this has sold extremely well in the last 24 months, the excellent capital returns sweetening the bitter pill of having to sell.

Buildings with development potential or planning consent are much sought after in prime central London. Those Irish investors and developers who own this type of stock often face challenges raising finance to develop their schemes, and it is this type of smaller site in London that a growing number of discreet buyers like us specifically look to purchase. Less attractive are those off-plan schemes that have left many Irish buyers unable to complete on exchanged contracts.

So while the Irish might be returning to London to work or to sell, the traffic is not all one way.

The last few months has seen fact-finding trips to Dublin by UK investors. Many Irish nationals who have been in London for years, put off by the eye-watering prices of the boom can now see real value in Dublin, be it to relocate or for investment. Their geographical understanding of the Irish market gives them a disctinct advantage over international buyers.

Allsop’s forthcoming auction of 80 lots with Space4U has crystalised this interest. Many will be keeping a close eye on the results as a benchmark will be set by Allsop in the room.

Many potential investors in Irish stock simply want a clear steer on these deals but find it hard to evaluate the midterm view of the market. They are reluctant to deal with agents who may have been tarnished by overzealous pricing in the boom years. Hence the Allsop tie-up with Space Property Consultants, an independent company set up in 2008.

The significant reduction of stamp duty in Ireland coupled with the predicted softening of sterling is making now a perfect time for London-based investors to make that Irish purchase. The asset prices are very attractive with prime Dublin looking increasingly well priced. Ten per cent residential yields in certain locations will attract buyers who will hedge against UK inflation with an Irish purchase.

Buying this close to the bottom is the primary rationale. Certain UK lenders will fund such purchases now which will stimulate demand from the UK. It is hard to see the downside to a strategic Irish residential purchase.

Google’s deal in Montevetro did not go unnoticed. The palpable sense of relief that a new government has been created with a clear mandate from the Irish public is also felt in London by the Irish over here and the investors alike. Movement from the EU on the rate payable on the Irish debt will help.

Perceptions are important and the idea that Ireland appears to be turning a corner is hard to ignore. It’s a long way back and the story of the Irish in London is writing itself another chapter. But don’t be surprised if you hear a few English accents around Dublin too.

Brendan Conway is a London-based property consultant from Co Kildare. He has 15 years’ experience in the London property market and is currently director of London Residential Asset Management. lram.co.uk