How to buy a first home that won’t break the bank

Are you a first-time buyer? If you can get over the hump of mortgage approval, you are likely to pay less per month for your new pad than you would to rent it. Relaxed mortgage lending rules and an improvement in supply could make this the year you buy.

The first step to house hunting is budget. As of January this year, first-time buyers can borrow four times their salary with a 10 per cent deposit required. This should enable more buyers to make the leap to home ownership. Take a person or couple on an income of €80,000 – they can borrow €320,000 which, with a deposit of €35,555, should fund a home selling for €355,555.

However, rising interest rates may mean you don’t qualify for as big a mortgage as you did last year as banks will typically stress test your application at rates of about 2 per cent more than the rate offered. But with rents so high, many first-time buyers can demonstrate the capacity for repayment.

Do properties in my price range exist?

The number of choices for first-time buyers could shortly see a significant increase with the flight of landlords from the rental sector adding to the stock for sale. More than 2,500 notices of termination issued to tenants in the last quarter of 2022 were because the landlord intends to sell, according to figures from the Residential Tenancies Board. These properties should come to the market later this year.

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First-time trader-uppers appear to be moving this spring too, says Will Moore, a regional director with Sherry FitzGerald estate agents. “We are seeing more supply now in the sub-€500,000 price range which tends to be the first-time seller bringing a house on in the first three months of the year because those people are looking to trade up. There have definitely been more launches of this property type,” says Moore.

[ Why landlords are selling up: Taxes, regulation and fear of a Sinn Féin government ]

Supply overall is still tight, of course, but buyers willing to take on a “doer-upper”, fixing it up gradually as funds allow, will face less competition, says Moore. “I think there is a little bit of value there. There is less competition for that type of house at the moment. If I was advising friends or family, that’s what I’d say to them.”

With most property search legwork done online, don’t let rigid search parameters blinker you. Walk the streets, study Google Maps, don a pedometer and you’ll find housing estates within reach of the suburbs and amenities you love, without the postcode premium. The areas of Larkfield near pricier Harold’s Cross and St Mary’s Crescent, Walkinstown, near Terenure, are good examples, says Moore.

Don’t let orientation stand between you and a good house either, says Moore. “If a garden is long, you can get some good sun down at the end. Some north-facing gardens, if they are end-of-terrace, can get really good west-facing sun.”

Some first-time buyers are coming to viewings with a compass, he says. “There are good apps you can get to show you where the sun will be at certain times of the day.”

Fifteen-minute city

About 90 per cent of purchasers around Crumlin and Drimnagh are first-time buyers, says local estate agent Vincent Glavey. For younger buyers whose work and social life is still in the city, the many former local authority houses and smattering of apartments here are some of the most affordable you will find within a 15-minute cycle of the city.

The entire Dublin 12 area comprises the suburbs, or parts of Perrystown, Terenure, Kimmage and Walkinstown, with Crumlin and Drimnagh at the more affordable end. The median price of residential properties sold in the postcode is €385,000, according to Central Statistic Office (CSO) figures. Of the residential homes sold in February this year, more than half here were to first-time buyers, proving their popularity with those starting out. First-time buyers are getting older, we know, but at 34-years-old, the Drimnagh electoral area is among those with the lowest median age for a joint purchaser in the country.

So what’s here? As of mid-April, there were some 54 two- and three-bed homes for sale in Crumlin and Drimnagh in the €250,000 to €350,000 price range. These are potentially in reach of first-time buyers with a 10 per cent deposit and a household income of between €60,000 and €80,000.

Tech workers, teachers and professionals working in the nearby hospitals make up the buyers here, says Glavey. “Most of them would have loan approval of up to €350,000 or so, and some up to €380,000,” he says. Three-beds are popular, providing room to grow for starter families as well as space to work from home.

Properties closer to the canal, accessible to the city via good bus and cycle lanes, are selling well. Young purchasers priced out of Dublin 8 just over the canal can reap the benefits of being Dublin 8 adjacent. Eat at Noshington, drink at MVP and cycle home, without the burden of a large mortgage.

If you are jaded by the precarity of renting and want out, further along the M50 a C-rated two-bed apartment with a modern kitchen and bathroom is for sale for €235,000 in Park West, Dublin 12. The development is located next to Park West Business Park, Park West train station, the M50 and N4, and within a 15-minute walk of Kylemore Luas stop. This property could be in reach of individuals or couples earning €60,000. Those with a deposit of €23,500 borrowing €211,500 would have repayments of about €950 a month over 30 years.

If you are not completely browned off with house-sharing, you could rent out the second bedroom; rental earnings will go a long way towards helping to pay your mortgage and annual property management charge.

The cost of materials and the availability of tradespeople will mean less competition for doer-uppers, says Glavey. There are plenty of these in Crumlin and Drimnagh. “Houses that require some work but are liveable, they are probably the best bargains right now because you can do the work while you are living there,” he says.

[ Dublin property market dominated by first-time buyers and landlords exiting, says DNG ]

For those who don’t have the appetite for a project, the sellers of number 51 Saul Road, Crumlin, a two-bed end-of-terrace home with a south-facing garden, have already done the work. Upgrades include a new roof, rewiring, insulation in the attic and walls, a new stove, kitchen and bathroom. With a C2 Ber it was on the market for €349,000 through Mullery O’Gara and has recently gone sale agreed.

With the new national children’s hospital at the nearby St James’s Hospital site to employ 5,000 people when it opens in late 2024, demand and prices in the area are likely to increase.

Southside story

There are areas where some first-time buyers probably don’t bother searching – Glenageary in south Dublin is a case in point. The median price here is €652,500. In February, there was only one first-time buyer purchasing here to every four trader-uppers, according to CSO figures.

That’s what makes houses such as 85 O’Rourke Park in nearby Sallynoggin a potential find. This three-bed semi with a south-facing garden is on the market for €445,000, through DNG. Buyers with a €45,000 deposit will need a household income of about €100,000 to secure the mortgage. Monthly repayments will be about €1,830, well below rents in the area.

“Sometimes first-time buyers unable to afford a property in Dún Laoghaire or Glenageary overlook this area, even though it is right beside the sea,” says Orla McMorrow of DNG. “It has the same schools and amenities as Dún Laoghaire and Glenageary,” she says.

First-time buyers are getting older, we know. Those hoping to start a family should factor room to grow into their search if they can.

“As a first-time buyer this house might suit you as it stands, but a couple of years down the road if you find you are outgrowing it, you may not need to up sticks. You can add an extension on the back and still have a good garden,” says McMorrow.

[ Saving for a new house in 2023? Here is everything you need to know ]

At the upper end of the range for first-time buyers in the Dún Laoghaire-Rathdown area is 22 McCabe Villas. A recently refurbished, two-bed terrace in walking distance of Blackrock village and the Dart, it’s on the market for €475,000.

Overall, stock remains an issue, says McMorrow, but prices are stabilising. “We are still 28 per cent below where we were at our last peak in 2006, so I think there is probably more to go even though this year we do think it might stabilise slightly. We don’t see it falling back.”

Help to buy new homes

Government support for first-time buyers is focused on new homes. The majority of these are being built further out of town, but those availing of the schemes can leapfrog past draughty doer-uppers straight into A-rated homes.

Kilcarbery Grange, built in partnership with South Dublin County Council is west of Clondalkin in Dublin 22. When completed, it will consist of more than 1,000 homes – 60 per cent private, 35 per cent social and 5 per cent affordable.

The first phases of Kilcarbery Grange sold out quickly, proving popular with first-time buyers availing of the Help to Buy scheme. A new phase is to be released shortly. Three-bed A-rated homes will start at about €400,000 to €430,000 and so will qualify for the Help to Buy and the First Home shared-equity schemes. Four-beds will start at €470,000 and will qualify for the First Home scheme, according to agents DNG.

[ Brianna Parkins: Buying a first home in Ireland is very difficult, but not impossible ]

Shops, a civic square and creche are planned, as is a new train station at Fonthill which will reach Connolly station in 25 minutes. In the meantime, it’s an 18-minute spin by bike to the red line Luas stop at the Red Cow.

Five properties under €500,000

122 Cashel Road, Crumlin

€375,000, Sherry FitzGerald

A two-bed end-of-terrace house extending to 65sq m (700sq ft) in move-in condition with a large back garden. A first-time buyer with a 10 per cent deposit would need a household income of about €85,000 to get a mortgage of €337,500 over 30 years. Monthly repayments would be about €1,560.

22 McCabe Villas, Booterstown

€475,000, DNG

A recently refurbished, two-bed terrace extending to 67sq m (720sq ft), in walking distance of Blackrock village and the Dart. A €47,500 deposit would be required. A couple with a combined income of about €110,000 could get a mortgage of €428,000 with monthly payments of about €1,960. Rents for a two-bed apartment in the area are up to €3,000.

72 Drumcliffe Road, Cabra

€375,000, Property Partners O’Brien Swaine

This property is a two-bed terrace extending to 90sq m (670sq ft) with a new kitchen extension, impressive B3 rating and a blockwork shed in use as a home gym. First-time buyers with a 10 per cent deposit would need a household income of about €85,000 to get a mortgage of €337,500. Monthly repayments would be about €1,560. Homes with a Ber of B3 and above can qualify for Bank of Ireland’s green mortgage with a discount of 0.30 per cent on their fixed-rate options.

91 Collins Avenue East, Killester

€425,000, Karen Mulvaney Property

This two-bedroom end-of-terrace home, extending to 61.5sq m (662sq ft), has a large south-facing rear garden backing on to Clontarf Golf Club. It has potential to extend, subject to planning permission. With a deposit of €42,500, first time-buyers would need an income of €96,000 to borrow €384,000. Monthly repayments would be about €1,760.

95 The Academy, Park West, Dublin 12

€235,000, Smith Curley Estate Agents

A C-rated two-bed apartment extending to 76sq m (818sq ft), with a modern kitchen and bathroom, and a big L-shaped balcony. This property could be in reach of individuals or couples earning €60,000. Those with a deposit of €23,500 borrowing €211,500 would have repayments of about €950 a month over 30 years.