What first-time buyers want: a traditional semi

The buy now, flip later culture of the bubble years is well and truly over. These days, first-time buyers want "future-proof" family homes. FRANCES O'ROURKEreports and EDEL MORGANfinds houses first-timers

FIRST-TIME buyers are usually couples, they’re looking for three-bed semis with a bit of garden, and when they go looking for a mortgage, they have to plead and grovel. No, it’s not the 1970s all over again but it’s beginning to feel a bit like it in the property market.

First-time buyers are beginning to dominate sales in our shrunken property market, tempted by prices in suburbs that have put the ever-popular three-bed semi within their grasp again.

The number actually getting money to buy is way down of course: the figure for all mortgages given in the second quarter of this year is down to 1970/1971 levels, when records here began, says broker Frank Conway of moneycoach.ie.

But FTBs got 56 per cent of the total of 2,643 mortgages, when normally, first-timers represent only a quarter to a third of the market.

So, what’s on offer to first-time buyers and what do they have to do to get a loan to buy a house?

A quick glance through sites such as myhome.ie shows a four-bed semi in Templeogue for sale for €398,000; a three-bed in Harold’s Cross for €360,000; a three-bed just off Botanic Road in Glasnevin for €350,000 and a house on Johnstown Road in Dún Laoghaire for €309,000.

MyHome managing director Angela Keegan says: “For first-time buyers, the three-bed is the house of choice. Couples are looking for a family house with a garden that will see them through for the long term. And their preference is for second-hand homes in well-established areas with good transport links. In fact, such is the demand for these traditional houses that a shortage of supply may be developing in suburbs like Terenure, Clontarf and Drumcondra.”

Prices are mostly still falling in these areas, she adds – but MyHome’s figures for the third quarter of 2011 show that the rate of price falls in city suburbs is lower than the national average of 3.8 per cent.

Out in Greystones/Kilcoole, Sherry Fitz-Gerald’s Eamonn Foley has two- and three-bedroom houses from around €200,000. He agrees that the first-time buyers he meets are “buying their second house first – they’re future proofing”. Popular with FTBs here are second-hand 1980s three-beds – he has, for example, a two-bed 1980s bungalow with two attic rooms for €245,000 in Redford Park in Greystones.

Mortgage broker Karl Deeter is just as certain of the trend towards houses: “The overwhelming majority of our clients, over 90 per cent, are not looking to buy apartments.” He doesn’t think people are – or should – make a decision to buy on the basis that their mortgage repayments would be similar to their rents.

Many people will stretch a little to pay the mortgage on a house they plan to live in forever “or at least the foreseeable future”. (He also reminds would-be buyers that mortgages taken out next year will get a reduced rate of mortgage interest tax relief before it disappears after 2012.)

Broker Frank Conway agrees, but agents Felicity Fox and Owen Reilly say that some first-time buyers, mainly singles, are opting for apartments. “They go for established suburban apartments, well-built one or two-beds with good storage in a good location,” says Fox. “There are people who want to live in town, there is a market for apartments,” says Reilly.

But whatever kind of property a first-time buyer is looking for, the next step, getting a loan, is very, very difficult. “God love them, we’re grilling people as they come along,” says Felicity Fox. “We ask them what loan to value they’re looking for. We ask everyone to go to the bank to get approval, tell them they’re wasting their time looking if they don’t.”

People on the staff of high profile tech companies such as Google and Facebook can get 90 per cent loans, she says, and perhaps doctors who have staff jobs as opposed to contracts. Others may be lucky to get a 70-80 per cent mortgage. But if you’re working in construction or related industries, or if you’re freelance or on a contract – even a public sector contract, say, like many teachers – it will be a lot harder.

Even if you’ve had a well-paid,steady job for a decade or so, you may not be considered a good bet: brokers have scary stories of lenders assessing not just the applicant’s financial health, but that of the company he/she works for.

Frank Conway tells the story of one individual who only got a loan after his broker made strong representations to the lender: he had been turned down because his employer, a pharmaceutical company, had outsourced one division and laid off some staff, but was in very good financial health.

Conway and Deeter warn first-time buyers to establish a good savings records for at least a year before applying for a loan. “If you want a loan where you’ll be paying €1,300 a month, but are only paying €500 a month now, start saving the extra €800 a month now. You need to prove you can save.” Lenders won’t accept parents as guarantors any more, or lumps of parents’ money “helicoptered into your account as proof of your financial viability”, says Deeter. You’ll need proof of your earnings in payslips and P60s – and, ironically, banks want to see bank statements on official bank stationery even though “banks are pushing us all towards electronic banking,” says Conway.

From South Circular to Fairview and beyond: five for first-timers

Address

: 530 South Circular Road, Dublin 8

Price: €285,000

Agent: Felicity Fox

This Tudor-style four-bedroom house at the Rialto end of the South Circular Road has high ceilings, cast-iron fireplaces, and original floorboards and cornicing. It is 110sq m (1,184sq ft) and is close to the Luas. It has a drawing room with a bay window, a dining room and an eat-in kitchen with a range cooker and a Travertine floor. There is resident-permit, on-street parking.

Address: 73 Pembroke Cottages, Donnybrook, Dublin 4

Price: €345,000

Agent: Felicity Fox

This two-bedroom 66sq m (720sq ft) cottage has been extended and remodelled to create an airy, open-plan living space, thanks to the floor-to-ceiling height windows and velux windows. Both bedrooms are doubles and there is a bathroom at the back. The livingroom has a vaulted ceiling and there’s a diningroom, a fitted kitchen and a courtyard to the rear.

Address: Laurel Cottage, Jordanstown, Oldtown, Co Dublin

Price: €295,000

Agent: Sherry FitzGerald

For first-time buyers who like the idea of having their own land, Laurel Cottage, on half an acre, has three bedrooms. It has recently been rewired and re-plumbed, had its external walls dry lined and had its roof and outside footpaths replaced. Inside it has oak flooring and a new kitchen, sitting room and kitchen/dining room.

Address: Apartment 21 Hanover Quarter, Hanover Quay, Dublin 2

Price: €330,000

Agent: Colliers International

This is a three-bedroom duplex apartment to the rear of the Hanover quarter development in the Dublin’s south docklands. The 112sq m (1,205sq ft) apartment is on the top floor and comes with an underground car parking space. It has a study, living/dining room and a separate kitchen. The service charge is €1,650 per annum.

Address: 11 Sunnybank, Kilpedder, Co Wicklow

Price: €250,000

Agent: Sherry FitzGerald

Close to Greystones, 11 Sunnybank is a two-bedroom 84sq m (904sq ft) property in a small development of houses. It has a livingroom, kitchen/diningroom, bathroom and two bedrooms. The gravel driveway provides parking and it has a pretty elevated front garden with raised beds and countryside views. The rear garden is mainly lawn with borders and pond.