Rapprochement brings rehabilitation

Posted on November 10, 2006 · Posted in Financial Times

Life in Northern Ireland has been transformed. Five years ago you were likely to face a British ­soldier pointing a rifle when you looked out of a car window into a roadside field. Now, thanks to rapprochement between the province’s Republican and Loyalist factions, it is rare to see the army at all.

The speed of change in the security situation is mirrored by a phenomenal growth in property values, as more people realise the pleasures of living in Northern Ireland. Returning émigrés, investors and British and other Europeans seeking a more relaxed lifestyle have bought homes – unbelievable as it would have seemed a decade ago.

A recent report from the Halifax bank illustrates the point. The small border city of Newry has had the UK’s fastest-growing house prices over the past decade. Antrim, in the northeast, is fifth in the league. And the whole of Northern Ireland showed stronger gains than any other UK region apart from London, with the average house price moving from 11th to sixth out of 12.

“It’s a combination of economic and political factors,” says Martin Ellis, chief economist at Halifax. “The Northern Ireland economy has done well over recent years, so people have more money to spend. The more settled political position has helped and attracted more investment. The Republic of Ireland economy is very strong and money has come out of there and invested in the Northern Ireland homes market for second homes and for buy-to-let investment.”

These factors are especially true in Newry, which is directly between Dublin and Belfast. “A lot of investors are coming,” says Orla Jackson, chief executive of the Newry Chamber of Commerce and Trade. “It has a very up-and-coming economy. Unemployment has fallen from almost 30 per cent in the 1980s to an average now of 2.5 per cent.”

The housing market is strong across the province. Even Strabane, in the west – recently assessed as the eighth worst place to live in the UK by a Channel 4 television programme – has experienced dramatic price rises. The local Remax estate agency reports annual growth of 37 per cent in the town.

“The market in Northern Ireland in the past nine months has been more buoyant than at any time,” says Patrick Palmer, a partner at Belfast’s Templeton Robinson estate agency. “Across the board, prices have risen dramatically and are going through the roof.”

Palmer predicts that the market will slow down in the new year, an opinion shared by Gault Irvine at Ulster Property Sales, who expects the large number of development proposals in the pipeline to dampen price growth.

But Simon Brien, at the Eric Cairns Partnership estate agency, is more optimistic. He argues that appreciation in land values – he quotes 25 per cent to 40 per cent in recent months – has not yet shown up in house prices. And he thinks new planning restrictions in Belfast, promoting the use of brownfield instead of greenfield sites and banning isolated rural development, will stimulate further increases.

Brien emphasises that the boom is hitting all areas and all levels of the Northern Ireland market. “A property we sold for £130,000 in January this year is now selling for £170,000,” he says. “It’s the same in Carrickfergus, County Down and County Armagh. We sold a nice town house in Mount Pleasant [south of Belfast] in the spring of this year, at the top of the market, for £950,000. This week an identical house was put on at £1.5m and had an offer on it” almost immediately. In Belfast, one development of 183 apartments sold out in two days, mostly to owner occupiers. With another development, there were more than 5,000 expressions of interest for just 476 units.

“There has been a lot of change [in Belfast],” Brien says. “Ten years ago there wasn’t that much interest in putting life back into the city. [Now] new investment is coming into the centre, there are more cultural areas [and] there is more architectural flair in the new buildings.”

This view is endorsed by a walk through the city. Where the downtown was once crumbling, now large new developments are in place, with more under way. It’s easy to see how it might, in a couple years, become an impressive European city, following in the footsteps of Manchester, for example.

Similar regeneration, both urban and rural, can be found around the province. Road improvements are helping to ease journeys and opening up new towns and neighbourhoods to commuters. Even so, the pace of life remains more relaxed than in England, which has drawn in relocators, Brien says. “If you are stuck for 10 or 15 minutes here you think you are in a big traffic jam. Schools, restaurants and general social facilities are all good and getting better all the time.”

That perception is one that local councils are eager to promote. Antrim, for example, has seen significant investment and indigenous economic growth. But, say local officials, its biggest draws are increased cultural events and the fact that Lough Neagh – the largest freshwater lake in the UK or Ireland and a sailing and watersports centre – is on the edge of the city. Nearby are the Glens of Antrim, the Giant’s Causeway and three excellent golf courses – Royal Portrush, Portstewart and Gracehill.

Newry’s proponents note that it is situated next to two areas of outstanding natural beauty – the Mourne Mountains and the Ring of Gullion – and is a short drive from a coast that offers yachting, surfing and water skiing.

Rhona Moore-Harte, a Scot, moved from London to Newry in September last year – though she retains homes in London and the US – to open an art gallery. Her aim was to capitalise on an expected economic boom and, so far, she’s been encouraged by how many people are willing to spend £10,000 and more on paintings. “We sell quite a few,” she says.

Still, quality of life was the primary draw. “People were the number one. They are great people. Also, I love the simple life. There’s a camaraderie here, compared with London. I love the place. I wanted to live somewhere where I enjoyed it, somewhere I could feel comfortable to live in. For me, Newry is that. It is equidistant to Belfast and Dublin. And the air links are good.”

Having started as a renter, she is now determined to buy but she keeps getting caught out by the ever-rising prices.

There are other drawbacks to Northern Ireland as well. The security situation is not fully resolved. There have been serious fire bomb attacks on stores in recent days and community tensions persist in many areas, particularly in the public housing estates of Belfast and other cities. Outsiders moving in can also feel frustrated at a lack of dynamism or speed of government action. Moore-Harte was told it would take six months to get a decision on an intended licence application for a champagne bar, for example.

Still, there is a palpable feeling that the province has turned a corner. “Because of the Troubles, people lacked self-esteem,” Moore-Harte says. “That’s coming back now.”