FIRST-TIME BUYERS’ GUIDE
FULL LIST OF NEW HOMES AROUND THE COUNTRY
IT’S hardly surprising news: the new homes market for first-time buyers (FTBs) is on the up, and there are predictions that prices will continue to rise, particularly in Dublin and the greater Dublin area. Fuelled by the Government’s introduction of a help-to-buy scheme in last October’s Budget (applications opened in early January), together with a revision of Central Bank borrowing rules, there has been a notable increase in enquiries about new homes, according to estate agents across the country.
Enquiries for new homes have risen by approximately 15pc over and above what they normally would be at this stage, estimates Ken MacDonald of Hooke & MacDonald, who specialise in new home schemes in Dublin and the commuter belt.
Bernie Carroll of Carroll Estates launched a further phase of Barnageeragh Cove in Skerries in November. “We purposely waited until after the Budget,” he says. “We sold 18 houses in a week. Compare that to September sales which were quite good, but in all of September we sold four.”
The measures have had a positive effect on both buyer confidence, and the confidence of developers, but demand still massively outstrips the number of new homes coming to the market.
“While there is a pretty significant pick up in the volume of construction of new homes, it is still hugely off the kind of steady requirement needed,” says Sherry FitzGerald’s head of new homes, Ivan Gaine. “There were 14,000 new homes completed last year; there might be 17,00018,000 completed nationally this year — but really we need twice that.”
While the measures should undoubtedly act as an incentive for developers, these things take time. “It’s not a tap that can be quickly turned on or turned off,” he says of the nature of construction projects. “It’s only in the last six months that this has come to the fore and it will take a little time to get everything up and running.”
It’s a countrywide problem. “We definitely have under-supply and over-demand,” says Paul Hannon, director at Sherry FitzGerald, head of new homes in Cork. He points out, however, that Cork is beginning to see an increase in brand new schemes — those where the sod is being turned for the first time — as opposed to new homes stock from developments first launched pre-crash.
Buyers, builders and agents all report that the Government’s help-to-buy scheme is somewhat challenging to get to grips with. In the case of first-time buyers, your first step should be to get the help of a financial advisor, both to figure out exactly how much you might be due under the scheme, and to assist in getting your general finances in the best possible shape before you might actually apply for a loan (see page 3).
Broker Michael Dowling, chairman of the IBA mortgage committee, notes that “it’s very important that the builder is registered. To date, only 17 builders have applied to be registered with
Revenue for the help-to-buy scheme.”
Working with a financial advisor months before you apply for mortgage approval can avoid delays in the process. “First-time buyers coming to us often find that they’re probably not yet ready to submit their mortgage application,” reflects Dowling. “They might need to tidy up their accounts and review some of their spending. So what we say to them is ‘this is what you’ve got to do for the next six months to put you in the best position to get the maximum amount of money’.”
The next step is to hire a good solicitor. It’s worth enquiring with estate agents, who will have details of solicitors experienced in this area. Some developments have solicitors attached who may be offering a package.
As much as possible keep an open mind and view as many new developments as possible. “I think having a number of options is important — unfortunately we’re not producing the volumes that we require, so you may not get your first preference,” advises Gaine of Sherry FitzGerald.
Will Coonan of REA Coonan agrees. “Register your details with agents so you will be contacted with any new releases or new phases.”
Building up a comprehensive picture of what’s out there helps in identifying your priorities, ie, whether you would trade a commute and more space for living closer to the city centre in a smaller house; or whether you want open-plan or not.
“Your requirements may change as you get into the nitty-gritty of walking through the show house,” Coonan points out. Furthermore, releases of new housing schemes can happen with little notice. “By viewing everything, you will be able to rule in and rule out as quickly as new houses are released.”
If you are attending a viewing determined to buy, bring a booking deposit — either a cheque or a bank draft — ideally your solicitor’s details, and have your financial research underway with the bank. If you’re buying off-plan, be aware of the completion date and how long your mortgage approval lasts. Changes in your personal circumstances, particularly your employment, could affect your loan offer.
While queues overnight for launches seem a thing of the past, buyers report arriving hours before the launch opens at particularly highly sought-after developments. New homes operate on a first-come first-served basis — the lack of bidding wars is undoubtedly one of the bonuses of buying new, rather than secondhand.
Another bonus is, of course, that the new energy regulations bring lower running costs. Builder Michael Cosgrave, whose family’s construction business is at the forefront of new developments in energy-efficient homes, explains that there are no further major developments in energy regulations until we go to nearly zero energy building standards in 2020. New homes, particularly those with an A2 rating, are not far off that point already, he says. So those buying now should not expect any major new innovation that will put their home out-of-date in terms of energy efficiency. Operating systems within the house should be easy to use. “What’s important is that people are educated by their builder during the handover,” Cosgrave advises. “But most builders do that nowadays anyway.”
Organisation is crucial. “Keep track of absolutely everything you’re doing, every cost and potential cost, in a really clear Google spreadsheet,” advises Caroline Foran of Gaffinteriors.
ie. “Have several different sheets within the one project file and make lists of everything. And paper wise, buy a big, fat folder — it sounds simple but it’s such a headache when these things get separated and you’re tearing your place asunder for that one document that you need.”
Know the timeline of what is needed and when, from your bank, solicitor, sales agent, and builder. Notice periods can be tight, so this helps to avoid any delays.
“I would encourage buyers to liaise with the developer,” says Coonan. “Check out completion times so you will have mortgage and life cover in place at the correct time. Ask lots of questions of people already living on the road. Find out what further developments are coming down the line.”
Know exactly what you’re getting, and understand any difference between your home and the show house so you don’t get any nasty surprises. “Be aware of the specification and what’s coming with the house; appliances in kitchens, what flooring will be included, tiling, and budget accordingly,” Barry Feenan of Knight Frank New Homes advises, adding it is important to be familiar with the different types of each three- or four-bedroom house within a development. Some may be two storeys, some three, and the layout of the living quarters may vary.
And finally, get professional advice before you buy. Interior designer Suzie McAdams says: “Be as thorough as you would with an old house. I have seen new homes that have structural issues and you may be left footing the bill for repairs.” Even though new homes come highly certified, it is always worth getting an independent survey done by a registered professional, whether an architect, engineer or building surveyor.
Happy hunting.