Sunday 11 December 2016

Home economics... answering your property questions

Published 16/10/2015 | 02:30

Insulation will help to reduce your heating costs and grants are available.
Insulation will help to reduce your heating costs and grants are available.

Our property expert on how to improve energy ratings of older houses and how parents can help their children on to the property ladder.

  • Go To

Question: We have been looking at new houses and are very impressed with the A energy ratings and energy saving systems contained in a lot of them. We are also viewing older properties with BER ratings of D /E or F, which seems quite off putting. What measures can be taken to improve these older houses?  Is it possible to increase the BER rating of properties 20 and 30 plus years old and what would they cost?

Sinead replies: Many homes built from 2012 onwards have a Building Energy Rating on the A scale and include a range of energy efficient elements including solar panels, underfloor heating, stoves and air/water source pumps.

However anything dating from the 70s/80s typically achieves an E rating, particularly if such homes have oil or gas central heating and have had no upgrades in the meantime. There is plenty you can do to improve the lot of one of these properties and many people manage to get very good BERs following some investment.

The Sustainable Energy Authority of Ireland (SEAI) told me that the first thing to do is add insulation to the external walls (polystyrene beads is the most common method) and to the roof (up to 300mm).

Installing a new gas or oil boiler will give you at least 90pc efficiency and independent controls to space and water heating systems. These measures alone could bring the house to C1 and happily, there are grants available to aid the cost which are not means tested.

The cost of wall, roof and heating upgrades like this would probably cost €4,500 - €5,000 for an average home but it's very hard to say without quotes for the specific house. The grants amount to €1,650 depending on the size of the property. SEAI reckons you would be 'paid back' in lower heating bills by 4 - 5 years. See www.seai.ie for more information. The scheme is called 'Better Energy Homes".

In addition, new windows would certainly help - most firms will retrofit double or triple glazing to older houses but it is expensive, so get several quotes.

Question: My husband and I own our own dormer bungalow, mortgage free. We have two daughters in permanent jobs, but with no chance of getting a mortgage. Is there a scheme where we can get money on our house and pay it back after death in order to help them get a deposit?

Sinead replies: There are two issues here. The first is your daughters' inability to get a mortgage. Banks have significantly upped their lending and all five are freely offering mortgages at the moment. With permanent jobs, I can't see any reason they wouldn't qualify (perhaps even as a couple) unless there are other credit issues. They should make an appointment with a specialist mortgage broker who will take them through the process and at least find out for sure.

With regard to helping them out, you can give them up to €3,000 each, tax free, per year under the small gifts exemption scheme (your husband and you means €6,000 per child). You can give them any cash amount over that but it will be added to their eventual inheritance for tax purposes.

The only way of using equity of your home is to take out a personal loan at the full going interest rate. Banks are unlikely to offer you yourselves a re-mortgage, unless you are still young enough to repay it in your lifetime. I don't know your ages, but if you say you are still 10 years off retirement, you could still qualify.

However I have to tell you that there is no scheme here which allows a mortgage to be deferred until you pass away; you would have to make the repayments as you go. In any event, banks frown on parental deposits - to give someone a mortgage they want to see a strong savings track record from the home owner to be.

Think through those options but do get financial advice before making a decision.

The issue of deposits are becoming a real issue now for first time buyers especially in Dublin as the bite of the Central Bank's rules hit home.

They only need to raise €22,000 to provide the 10pc of the €220,000 cap required which is proving acceptable in Donegal, Kerry, Leitrim and most other counties. However, property in Dublin is still priced stubbornly high - over €300,000 in the city, and around €540,000 in the more desirable areas. Even the cost of an elusive three bed semi is proving too much.

Is there a case for a higher 'Dublin Deposit'?

It might stick in the craw of the bean counters in Dame Street but another suggestion was made for an SSIA style scheme to help in the longer term. Brokers on the 'IrishMorgages' app say that a savings incentive, pitched into by Government (as it was during the original 2001 version) with a 25pc bonus included would save both on the amount 'wasted' rent and towards deposit costs.

It's unlikely to be heard by those ears that need to. The general direction appears to be to create more supply and let the market look after itself.

It will, but very slowly - and perhaps no faster than a 5 year SSIA would have impacted in any event. Until then, the savings of younger prospective buyers are being eroded away by inflation in a chicken-and-egg situation.

The Ryan review

The issue of deposits are becoming a real issue now for first time buyers especially in Dublin as  the bite of the Central Bank’s  rules hit home. 

They only need to raise €22,000 to provide the 10pc of the €220,000 cap required which is proving acceptable in Donegal, Kerry, Leitrim and most other counties.  However, property in Dublin is still priced stubbornly high  — over €300,000 in the city, and around €540,000 in the more desirable areas. Even the cost of  an elusive three bed semi is proving too much.

Is there a case for a higher ‘Dublin Deposit’?

It might stick in the craw of the bean counters in Dame Street but another suggestion was made for an SSIA style scheme to help in the longer term. Brokers on the ‘IrishMorgages’ app say that a savings incentive, pitched into by Government (as it was during the original 2001 version) with a 25pc bonus included would save both on the amount ‘wasted’ rent and towards deposit costs.

It’s unlikely to be heard by  those ears that need to. The general direction appears to  be to create more supply and let the market look after itself. 

It will, but very slowly — and perhaps no faster than a 5 year SSIA would have impacted in  any event. Until then, the savings of younger prospective buyers  are being eroded away by inflation in a chicken-and-egg situation.

Indo Property

Read More

Promoted articles

Editors Choice

Also in Business