By Conor Power,Irishexaminer.com

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It’s additional credit from the Government that allows a first-time buyer to bridge the gap between what their budget allows for and the rising price of the new home.  The initial take-up on it was quite slow – possibly because people were not keen to take on another loan.

Once the take-up started to become more widespread, however, it spread quickly amongst a populace eager to get into their first homes.  There are limits on the purchase price that will qualify for the scheme. With house prices continuing to rise in a supply-starved market, the value limits have been a hindrance but this year, they were extended in Cork County. 

“In Cork County, the First Homes Scheme threshold cap increased from €425,000 to €450,000 in July,” says Paul Hannon, Director of Sherry Fitzgerald New Homes, “so that has been a welcome development and has definitely assisted purchasers to buy a new three-bed-semi-detached home at the €450,000 mark; where they wouldn’t have been able to buy them before.” 

“Now, more than ever, we’ve seen the importance of the government schemes and the need for buyers to use them,” says Elizabeth Hegarty Divisional Director at Savills in Cork. “The Help-to-Buy incentive remains the most utilised scheme, with nearly 90% of our FTB sales priced within the threshold using the scheme.” 

The popular scheme allows First Time Buyers to a tax refund of 10% of the purchase price or €30,000 (whichever is the lower) on properties of €500,000 or less. 

“The use of the First Home scheme has definitely gained momentum,” comments Elizabeth, “and we’ve seen an average of 34% potential First Time Buyers looking to secure a home with Savills intending to use it.” 

Elizabeth also notes that the increase in the cap for the First Home Scheme in Cork county to €450,000 in July was a very welcome development. Also not to be forgotten are the ‘behind-the-scenes’ contributions in housing provision at a social-and-affordable level, provided through the Land Development Agency. The more of these, the more people will be housed and the less the pressure will be on house prices. 

“Savills are currently on the market with a third Affordable Purchase Scheme in conjunction with Cork City Council,” says Elizabeth, “and these schemes are a huge success, with eligible buyers securing their home under this scheme. With the Land Development Agency now present in Cork, we anticipate this will also provide a mix of cost rental and affordable homes to the market in the coming 12-24 months.” 

“The First Home Scheme is really successful now and it’s such a positive for First Time Buyers,” says CEO of IPAV, Genevieve McGuirk. “Unfortunately, a new trend that we’ve seen emerging is the affordability issue; in more and more cases, the cost of the property is going above that of the grant level.

“I firmly believe that the Government will keep these schemes going but the issue of too many houses simply being too expensive to qualify is there – particularly in the larger towns and cities, like Galway and Limerick. Limerick, in particular, has seen a sharp rise in property prices.” 

‘New Irish’ are making their mark

A phenomenon that has been shaping demand in certain parts of Cork city in particular is that of the ‘new Irish’ – those who have come from various countries to work in some of the big foreign companies that provide a huge amount of employment in the area.

These include Apple (who alone employ over 6,000 people) and a number of pharmaceutical companies.

Those coming from abroad and seeking to buy a home, however, come without the prejudices of the more local market, meaning that their criteria for buying a home tend to be unbiased and focused on the critical elements.

These include proximity to work and to local transport and schools, with factors such as nearby restaurants and pubs making less of a difference. As well as that, the choice of neighbourhood is very different because these are people looking at locations with a completely fresh pair of eyes.

These are homebuyers who are quite transient in terms of their location, whereas Irish people tend to be very location-specific in their criteria for a home. A homebuyer from Bishopstown will tend to buy in Ballincollig, for example, and consider living in somewhere like Carrigaline simply too far from their home base to seriously consider.

A couple of healthcare professionals from India, for example, won’t see a difference, whether they’re living in one location or the other, provided the transport links to work are good and reliable.

New home snag list

“I would recommend establishing their budget and criteria is a must,” says Elizabeth Hegarty of Savills. “Because stock has increased, buyers can tend to jump at a house option they are offered, without thinking through if this actually ticks all the boxes for them. Speak with estate agents and let us guide you towards something we feel can work for you.

“This is such a big thing for first-time buyers so we are here to help and guide you through the process to ensure you are happy with your first home. Research the area the house is located, drive around get a feel for the place… This is a common occurrence; people not properly researching public transport, childcare facilities and other important amenities.”

After the budget establishment and some local research, getting a snag list prepared is another important step in the process. It has become such an important element that there are now a number of companies in the marketplace that specialise in the preparation of a snag list for First Time Buyers. Alternatively, you can do your research online and with, perhaps, a bit of parental and legal advice.

Traditionally, it was the buyer’s engineer who would provide the basis of a snag list. There are, however, many more little things that are vital to making your first home a comfortable place. When added together, they can come to a tidy sum, so a snag list service is an important one.

A good solicitor will usually insist on you preparing a snag list and will also have someone to recommend. It’s advisable to book a “snagger” well in advance too, because it’s an occupation in high demand at the moment.

The cost will be in the region of a couple of hundred euros but in the greater scheme of things, it’s a relatively small sum that pays for itself. It doesn’t need to be intrusive or cause delays on the building site (for new homes) and it’s important to let the foreman know in advance in these cases.