Assessing the feasibility of renovating old properties in Ireland – Insights from the Real Cost of Renovation Report
Property in Ireland is currently in short supply, while there are plenty of vacant buildings available. It begs the question, why aren’t these buildings being used and refurbished?
A new study has highlighted the many financial and regulatory barriers people face when purchasing and renovating vacant or derelict building in Ireland.
The Society of Chartered Surveyors Ireland (SCSI) has published its first “Real Costs of Renovation Report” that examines the challenges faced by people seeking to buy and restore derelict or vacant buildings in Ireland. The study surveyed 20 case studies from around the country, revealing that less than a third of the buildings would be financially viable for restoration to habitable use. However, the report found that 25% of the vacant or derelict buildings analysed could be financially viable for renovation without grant aid, and that the number of viable properties would almost double if grants were increased by €50,000 to €100,000.
The study also found that location, size, and condition were critical factors for viability, and that 87% of renovation costs were accounted for by hard costs such as structure, plumbing, heating, extensions, and doors/windows, while soft costs like professional fees, utility connection charges, and planning fees, accounted for just 13%. The costs of renovating a home owner-occupier type property ranged from €161,000 in Askeaton, Co Limerick, to €377,000 for a property in Dublin city, to €605,000 in West Cork, the study found.
Additionally, the report found that eight out of ten chartered surveyors believed that it was more challenging for borrowers to obtain funding for renovation projects compared to new homes, while more than half of them stated that some building regulations were acting as significant barriers to the renovation of vacant or derelict units.
The SCSI recommends that feasibility grants be included under Croí Cónaithe to help prospective purchasers assess project viability, and that additional grant bands be established.
The SCSI also recommends that lenders establish clear lending policies and guidance for prospective renovators and that a specialist lender-type initiative be established to support renovation projects with preferential rates. The report suggests the introduction of measures such as green financing to make renovating properties more attractive and bring back more vacant and derelict properties to use.
The Real Cost of Renovation Study featured two dilapidated properties in West Cork. One of the properties was an old derelict house in Schull, which the study found to be financially feasible to renovate with the help of Croí Cónaithe grants. The other property, located in Beara, was deemed financially unfeasible to renovate despite the aid of grants.
Chartered Estate Agent Majella Galvin said the findings highlighted key challenges which people undertaking renovations projects face around costs and accessing finance.
“Rather than applying increased grants on a universal basis the SCSI is recommending a tailored approach with a feasibility grant included under Croí Cónaithe – as is the case in Scotland – to help prospective purchasers assess the viability of a project. So, while additional grant bands should be established the level of grant funding for a project would be informed by the findings of the feasibility study.”
The full report can be viewed on the SCSI website
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