The Irish Times ran a series of articles recently about returning emigrants trying to buy property in Ireland. It was targeting those recently returned and those who are planning to return over the next few years.
We know from local experience here in counties Wicklow and Wexford that the most recent wave or generation of emigrants (circa. 2008 to 2013) are already starting to return to Irish shores, having amassed experience and savings during their time abroad. For the overwhelming majority of people, returning to Ireland is inevitable. Speaking with people is this position, they usually want to return home around the time they are ready to start a family, or if they already have children, they tend to plan their return around important milestones like starting school or secondary school.
Certainly, they are returning to a healthier economy and jobs market, but there can be no doubt that the everyday property market is much more difficult for buyers and renters now than when they left.
While some return to the market as cash buyers (including first-time buyers), most need to get some portion of finance. If you think it is difficult to deal with the appointments, application forms, receipts and scattered paperwork of applying for a mortgage, just imagine the difficulties trying to do this from outside of Ireland! While banking has moved online, property is still relatively old-school and initial sit-down meetings with a financial advisor or in-branch mortgage manager is still the start of the mortgage application process. That is not to say arranging a mortgage, or approval in principle (AIP) from abroad is impossible, however, the reality is that it is more complicated.
Mortgage applicants in this position are not treated like ordinary, local homebuyers, nor are they treated like residential investors (which is only appropriate); essentially they are the modern hybrid buyer. They are unlikely to secure 90% mortgages, on the other hand, most do not need 90% LTV.
Remote buyers can expect to access approximately 50% but rarely in excess of 70% LTV. One unfortunate aspect here is that property prices are increasing at a faster rate than would-be buyers can grow their savings.
Also, it must be pointed out that overseas residents are not eligible for the help-to-buy scheme for first-time buyers purchasing a newly built home (although news reports this week suggest that this scheme might be axed shortly as it drove up property prices rather than stimulated new supply – on this not, if you are based in the South East and eligible for the scheme please do contact us here at Kinsella Estates to get a list of our new homes, just 45 minutes from South Dublin).
One area of confusion is the new EU directive that restricts foreign lending. This has made it more difficult for mortgage applicants outside the euro zone or not earning income in euro, notable exceptions are made for expats in the UK, Australia and Canada. Ulster Bank, AIB and Bank of Ireland are the main banks lending to returning expats, with Permanent TSB opting for euro zone customers only.
Overseas buyers who are able to access funding should expect to pay interest rates as high as 4.95%, which is considerably higher than the 2.9% rate enjoyed by most first-time buyers already living here.
For many, it might seem foolish to go through the effort of trying to find the right property and then to organise a mortgage while overseas; however, returning home usually means starting a new job, which effectively resets the mortgage counter and you might find yourself waiting a further 12 months before your applicant will be considered. 12 months is a long time in the overheated rental market right now.
Over the past few years, the team here at Kinsella Estates have been working with returning buyers; putting them in touch with mortgage brokers and lenders, helping them to understand the changed market locally and walking them through the purchase process. We understand the challenges and always work to accommodate such buyers through virtual house viewings, out-of-hours Skype calls or whatever is needed. If you are in this position, please do talk to us.
For specific queries or to speak with a local property expert about your buying and selling needs in Wexford, Wicklow and surrounding areas, contact Michael, Alan or Eileen Kinsella at kinsellaestates.ie .
Email me directly on email@example.com or telephone : +353 53 94 21718