Increase in first-time buyer activity

THERE has been a “significant increase” in activity in the first-time buyers market lately as an average deposit required for a house drops from €32,000 to €20,000.

According to Cork solicitors Keith Flynn & Company, many of their clients who have been “sitting on the fence” for the last 12 months are now making offers on houses and have been approved for finance.

They said the average loan in Cork city for a first-time buyer is now under €180,000, which is a reduction of 56% on the average loan in 2007, when first-time buyers were paying €317,500 for their first home.

Experts said AIB will lend 92% of the purchase price of a home, while ICS, Bank of Ireland, KBC and Permanent TSB all offer 90% finance, according to the solicitors.

The average home loan repayment has dropped from over €1,400 monthly to around €700.

Even with interest rates on the rise, first-time buyers can expect to borrow €180,000 over 35 years for €711 monthly after mortgage interest relief.

Mortgage interest relief is only available however until 31 December 2011 on house purchases for owner occupiers. If a house is bought before then the relief will be payable over the following seven years on a sliding scale.

Keith Flynn of Keith Flynn & Co Solicitors said since August 2008 almost everyone in the country has been watching property prices tumble.

“Almost everyone, that is. There has been a canny group of individuals who did not get carried away on the wave of hysteria that gripped the country during the boom years. These individuals are now coming out of hiding and snapping up property at bargain prices,” he said.

He said that although no one can say with certainty that we have hit rock bottom in terms of property prices, he said prices may not be the most important factor for prospective buyers.

Barry O’Sullivan of Evergreen Mortgages said once you have found your dream home, convincing the bank to give you a mortgage is the first hurdle to jump.

Keith Flynn & Co Solicitors are holding a free first-time buyers information evening on Thursday at the Silversprings Moran Hotel, Cork from 7pm-9pm.