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To build or to buy? The ultimate Mortgage Master test for Irish home hunters

build-or-buy

04 Sep 2017

Posted in:  First Time Buyer

It’s everybody’s dream to own their own home – somewhere to unwind and relax and get away from it all. So, if you are lucky enough to be taking those first steps the question remains: should you buy a house or channel your inner Kevin McCloud (of Grand Designs fame), to build your own dream house?

We know it can be tricky as most of us don’t know too much about either process when we are getting into it.

Luckily, you have EBS Mortgage Master wisdom on your side. So here are the three questions you should ask yourself before making the plunge. To build or to buy… that is the question.

1. How soon do I want to move in?

If timing is of the essence, then buying a home is a far faster process. Once you have spoken to the EBS mortgage team and have gotten that all-important mortgage approval, you can go out and start looking for a place that suits you.

Ultimately, the decision on how long to spend is yours, but if you’re quick, the whole process can take as little as two months.

So, if you have just accepted a new job or just want to be in your own place in the next eight-to-10 weeks, then buying a pre-built property is your best bet.

If you can afford to wait for longer, a self build might be the route for you. Last year in Ireland, 24 percent of all new houses were bought by first time buyers, but only 2 percent of those were new builds.

Not enough newly built houses are coming on the market (and probably won’t until at least 2020). But if you are lucky enough to find a plot of land that suits you, the process of building your own home from scratch usually takes around 18 months.

While you get the benefit of designing the house exactly to your own specifications, you also have to manage the build, the costs and the sheer length of time it takes to construct your own home.

2. How important is cost?

In general, it’s more expensive to build your own home than buy one ‘off the rack’. The figures for 2016 show that the average three-bed property in Dublin is €45,000 dearer to build than to buy (the average new build clocks in at €330,000 whereas the average house on the market came in at €285,000.)

When it comes to buying a house, there’s not a lot you can do to get the cost down apart from making a lower offer than the house is on the market for. If you build your own, there are ways to get the cost down.

The cost of materials only makes up 45 percent of the cost of a home; the extras like building labour costs and the price of land are two major additional costs. So if you already own a site or can do your own building, then you can really reduce the bottom line.

But not everyone is lucky enough to have either of those options, so buying a house usually works out cheaper.

3. What exact needs do you have?

Consider precisely what you and your family need in a home. If it’s the standard living room, kitchen, bedrooms and a couple of bathrooms – then buying a house should fit the bill.

 

The average house sold in Ireland last year was on the market for less than nine months – so this means that you should be able to move in immediately. It might not be to your exact taste but you can remedy that over time.

In addition to the savings you can make buying a house versus building your own, you also have to factor in the fact that gardens and outdoor spaces in existing houses are likely to have been already completed, and not something you’ll have to spend money on immediately.

But if your family has specific needs – such as adapted entry points for a family member with a disability or an artist’s studio or a dedicated weights room – then building your own might well be the way to go.

Let us help you decide

Regardless of what you decide on, the first step you should take is booking a meeting with an EBS Mortgage Master. They will guide you through every step of the process and help you figure out exactly what suits your needs.

EBS d.a.c. is regulated by the Central Bank of Ireland.  

The content of this blog is expressed in broad terms and is limited to general information purposes only. Readers should always seek professional advice to address issues arising in specific contexts and not seek to rely on the information in this blog which does not constitute any form of advice or recommendation by EBS d.a.c.

EBS d.a.c. neither accepts nor assumes any responsibility in relation to the contents of this blog and excludes all warranties, undertakings and representations (either express or implied) to the fullest extent permitted under applicable law.

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