Rising interest rates and material costs a concern
Rising interest rates are having an effect on the property market according to Mark Hyland, auctioneer at Terry Hyland Estate Agents.
“Rising interest rates are having an impact on people, including people who were going down the road of doing self-build,” he said. “Some are putting it on hold now despite having planning permission. When you couple it with the cost of labour and materials, it means new self-builds have become more difficult for a lot of people.”
Mark says the cost of building materials has dropped in the last few months from the peak of last year. Scarcity of labour has continued to add to the cost of self-build.
“We run a family hardware store, Hyland Hardware in Ballyhaise, we see it first hand. Where people previously got plans for a nice 2,500 square foot house, to get it near completion they are going way over budget. For someone to buy a site, do the groundworks, buy materials, and pay for planning fees, it remains less expensive to buy rather than build, though you may not have the choice of location and house spec. There are pros and cons to both.”
According to Mark, one option is to purchase an energy-efficient home.
“Energy ratings have become more important. Many banks are offering lower fixed mortgage rates called green mortgages, which offer a lower fixed mortgage rate for a B3 rating or higher. We have many properties on our books that fall into this category.
“People are very conscious when buying new builds and second-hand homes, especially with the rise in interest rates over the last few months. It’s getting more and more difficult for people to budget for purchases. On one hand while the banks did relax the lending rules allowing for four times your salary, they took it away with higher interest rates, which is leaving monthly repayments higher for people. It means that properties with a B3 and above energy rating are much more in demand.”
Mark says that the company’s experience in working with tradespeople and materials gives them a unique angle for property sales.
“We started out in 2007 in an office above our hardware store, but we since purchased our current office in Cavan Town which we moved to in 2018. Starting out when a downward turn approached might not seem ideal but it allowed us to build on our client base and gain experience gradually.
“Business has been very good in recent years. Our biggest thing is communication. From the moment we are instructed to sell a property to the moment the keys are handed over, we stay in constant contact with all of the relevant parties to ensure a successful outcome. We have achieved excellent prices and turnaround times for our clients.
“Though there are challenging market forces currently, we are optimistic for the times ahead.”