My wife and I are getting close to having a deposit saved for a starter home and we’re hoping you can give us some advice.
We live in a Dublin commuter town and there are not many homes coming up for sale. Those that do come up for sale that are in good shape go very quickly and often would not be affordable for us.
We’re wondering if we should try for a one- or two-bed apartment, or if it makes more sense to try to get an older home that needs work. Do you have any advice for buyers thinking about buying older properties and renovating? Is it possible to get grants that apply to renovations as well as the purchase price?
I’m getting an increasing number of such queries from loan-approved buyers looking to start the process of buying their first home, but falling at the first hurdle when they can’t find a home within their budget or in their desired location.
Given the scarcity of second-hand houses currently for sale, I think this trend is likely to continue for the short to medium term. While there are several new housing developments under way, the concentration is the Dublin commuter belt, and even with the Help to Buy and First Home schemes, many buyers are priced out of or don’t fit the criteria for new homes.
Second-hand houses can cost about 10 to 20 per cent less than new houses, but neither the Help to Buy or First Home schemes are available for the purchase of second-hand houses. One exception with the First Home Scheme is that it is available for tenants who are looking to purchase the home they are already renting. Known as the Tenant Home Purchase Scheme, it is for a tenant in situ who is served a notice of termination and wishes to purchase that house. This may be an option for you, and something you should investigate.
Your big debate at present is the one- or two-bed apartment versus a refurbishment opportunity. Only you can answer the fundamental question of apartment or house living, and there are advantages and disadvantages to both. Generally, apartments can be smaller, don’t have a private garden and their efficient running is largely dependent on the effectiveness of their management companies. On the other hand, general maintenance is much more manageable with refuse, insurance and exterior maintenance usually covered in the annual service charge.
Buying an older home that needs refurbishment, on the other hand, presents both opportunities and risk, as there’s considerably more work involved.
I counted 18 different housing grants and schemes available to owners for refurbishing older houses, varying from a grant scheme to replace lead pipes and fittings, to solar panel grants, and vacant or derelict property refurbishment grants. Some schemes allow you to claim tax credits towards work done, some are low-interest loans and some are grants.
One such scheme you should investigate is the recently launched Local Authority Purchase and Renovation scheme, which is an extension of the Local Authority Home Loan. Essentially, it’s a two-part loan in conjunction with the Vacant Property Refurbishment Grant, for which you must also qualify. You get a fixed-rate mortgage for the purchase of the property and a variable rate bridging loan for the amount you’ve been approved for the grant. There are the usual terms and conditions, but it’s certainly one worth checking out.
Symptomatic of how quickly things change, I’ve found lately that properties in need of refurbishment aren’t selling as quickly as they were. Perhaps a key reason for this are the challenges faced in finding builders, plumbers, electricians and other tradespeople to undertake renovations and extensions and, of course, the rising cost of same. However, if you are up for the challenge – especially perhaps if you, your partner or family members have construction experience – this might present you with an opportunity.
You will also need to quickly establish your budget for refurbishment works, you don’t want a scenario after you go sale agreed that you need to unwind the offer due to a lack of funds.
For further information, the Citizens Information website provides an excellent summary of what schemes are available, their criteria and application processes.
Ed Carey is a residential estate agent and a member of the Society of Chartered Surveyors Ireland
Do you have a query? Email propertyquestions@irishtimes.com
This column is a readers’ service. The content of the Property Clinic is provided for general information only. It is not intended as advice on which readers should rely. Professional or specialist advice should be obtained before persons take or refrain from any action on the basis of the content. The Irish Times and its contributors will not be liable for any loss or damage arising from reliance on any content
