Brexit exodus from London ‘causing house prices to surge in Dublin’

Ireland is likely to benefit from investment following Brexit

Financial services are set to flee Britain (Reuters)

House prices are set to surge across the Irish Sea as finance firms flee the City of London following the Brexit vote.

Dublin and the rest of Ireland are expected to benefit from significant overseas investment as firms begin to avoid the UK – with resulting pressure on demand for homes.

Economists at S&P expect Ireland to see the fastest house price growth in Europe as finance firms flee Brexit Britain, with 8.5 per cent this year and 7 per cent in 2018.

Ireland is one of the places banks and other institutions are expected to relocate after Britain leaves the EU, in order to guarantee so-called “passporting rights” to European financial markets.

Bank of America last month said it would make Ireland it’s European hub, while JPMorgan Chase has purchased a planned office building with space for around 1,000 employees.

“The resulting inflow of workers in need of housing should contribute to sustaining house-price increases in Dublin,” S&P economists said.

“Other regions, which have so far been lagging behind, will in turn benefit from a catch-up effect, as the economic recovery increasingly broadens there as well.”

Frankfurt in Germany is also expected to see an influx of finance workers after Brexit, with one report by Deutsche Bank suggesting an 11 per cent rise is on the cards.

Deutsche Bank has suggested as many as 4,000 workers could be relocated from London to the German finance capital after Britain leaves the EU.

S&P expects UK house prices to fall by 1 per cent in 2018. Like Britain, Ireland is also suffering from a shortage of new homes to keep up with demand, S&P said.