Saturday 24 September 2016

Brexit a double-edged sword for rural property

Jim O'Brien

Published 29/06/2016 | 02:30

Photo: Bloomberg
Photo: Bloomberg

UNCERTAINTY over the Brexit move has had an immediate impact on land purchases by UK customers throughout the country, according to auctioneers.

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"I had UK buyers for three different properties and about a month ago the three put matters on hold until they saw the result of Brexit," John Hodnett from Clonakilty, Co Cork told the Farming Independent.

"On Friday morning, two out of the three withdrew from their transactions and I am waiting to hear from the third," he said.

The four key issues identified by many auctioneers as potentially impacting on Irish rural property sales are: the drop in the value of sterling; a possible fall in incomes in the UK; a potential drop in farm incomes in Ireland; and concerns over a loss of free movement between Ireland and the UK.

Henry Kee from Ballybofey, Co Donegal said it is too early to tell what the impact will be. His company has a steady number of UK customers coming to purchase in the South based on the strength of sterling, but he expects this could change.

Base

"Up to now people have been coming across to buy based on value for money but now the customers from the UK may be driven by a need to have a base in the EU."

Pat O'Hagan of Savills maintained that this was a possible silver lining in what appeared to be very dark clouds.

"While the currency problems will not help, there is no doubt that UK customers who want a base in the EU will look to Ireland. This could be especially true of larger scale farmers," he said.

Robert Nixon from Kells agreed.

"Currently there is a steady market for smaller parcels of ground but the bigger farms are more difficult to shift. You could see UK buyers coming into the market for the bigger farms."

Like many auctioneers, Mr Nixon claimed that the biggest impact of Brexit on land prices will come from farm incomes here.

"If Brexit has the expected negative impact on Irish farm incomes, there will be an inevitable knock-on impact on the price of land," he said.

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