Farm Ireland
Independent.ie

Monday 25 March 2019

Brexit bind as uncertainty leads to land purchase delay

Buyers from at home and abroad are delaying land purchases due to the uncertainty surrounding the UK's departure from the EU

Rocketts Castle on 250ac in Waterford is typical of the estates sought by wealthy UK buyers. The private treaty sale is guided at €4.75m
Rocketts Castle on 250ac in Waterford is typical of the estates sought by wealthy UK buyers. The private treaty sale is guided at €4.75m

The twists and turns of the Brexit saga are having tangible effects on the land market here. Callum Bain of Colliers International property agents has seen the pattern of business change weekly as the story unfolds.

The phone lines became extremely busy as the prospect of a no-deal Brexit began to loom large. Individuals of "high-net worth" in the UK began to make contact with agents like Colliers, seeking sizeable farms in Ireland.

"During January and the first two weeks of February, we were very busy with enquiries from the UK," says Mr Bain.

"But since Theresa May announced the next series of votes will include a vote to prevent a no-deal scenario, many of the prospective buyers have put their offers on hold - at least until after March 12 to 14 when those votes are due to happen."

Bain doesn't expect much to change until the March 29 deadline has passed.

He refers to two cases that he says illustrate clearly what is going on.

"One buyer was hoping to acquire a farming property in Ireland to keep a foot in the UK and in the EU, while another was moving lock, stock and barrel to Ireland and bringing all his livestock," he says.

Legalities

Ireland is the preferred option for many of these property buyers as the legalities of buying land on the continent can be quite different to those that pertain here and in the UK.

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"Anyone selling land in France, land that is under lease, has to give first refusal to the sitting tenant, who can buy it at a price set by the local government, a price that must reflect the average land price in the region," adds Mr Bain.

James Butler of Savills has also seen a noticeable increase in viewings, bids and offers from the UK, especially in the last few months.

"People with no connection whatsoever to Ireland are looking at properties here, rural properties, from the house with a few acres to full-blown estates. These are cash buyers," he says.

"As the shape of Brexit becomes even more uncertain, people do as they always did in uncertain times - they sit on their hands and won't move until there is clarity.

"As agents, we try to keep the market moving, but it is very difficult these days, even though there are great opportunities for buyers and sellers in a market like this."

Butler is confident that once there is clarity, things will improve substantially. He points to his experience of the Scottish Referendum.

"I was working in Scotland when the referendum for Scottish independence took place," he said. "Normally 20 major estates a year change hands there. In 2014, the year of the referendum, six estates changed hands. Once the matter was settled, the market opened up and the 12 months after the referendum was one of the best years we had in Scotland in terms of sales.

"Commerce will go on once there is clarity."

For the moment, agents from Galway to Cork are experiencing a 'Brexit bind'.

Tuam auctioneer Martin Tyrell describes it as "a big black cloud hanging over everything", while Mick Barry of Fermoy says people are not making any big purchases until they see what happens.

Meath auctioneer Robert Nixon says people are reluctant to put properties on the market.

"They are afraid that if we start an advertising campaign now, within four weeks, the world might have changed, so they are holding off," he says.

Mr Nixon feels that Irish people are far more affected by the prospect of Brexit than people in the UK.

"I was talking to a friend of mine who does a lot of business in England and he said the place is flying," he says.

"He was at a machinery auction there last week and the guy in front of him bought six machines because he has the customers for them. Do they know something we don't?"

Dundalk auctioneer Raymond Fee has seen a marked increase in land enquiries from across the border, and while he can see a certain reticence in buyers and sellers in the Republic, he agrees with James Butler that once there is clarity, life will go on.

"Like every major calamity or catastrophe, things change but life still goes on and deals are being done," says Mr Fee.

"We don't know the real story. What we see is the PR, the spin - it is hard to know what is really going on behind the politics.

"In the meantime, life has to go on - and it is going on."

Indo Farming