Renovate or Move Home? AIB discusses the things that you should consider when making this decision.
Renovate or Move Home?
Now that the property market is picking up many Irish homeowners are thinking of moving on from the starter homes they bought in the boom. A lot of people fall in love with an area and don’t want to move out of it, not even for an extra bedroom and a bigger kitchen. And with a home improvement loan they may not have to.
If you’ve ever watched Room to Improve, you’ll know you can totally transform a house, especially with the help of a good architect. So if you are happy with the bones of your house and have the space to extend it’s definitely worth considering a renovation before you sell up and move on.
You may already be in your forever home but it may just need a facelift and some cosmetic tweaks. Or, if your family has grown, some more extreme structural changes may need to be made. Whatever your motivation, it’s always worth considering if you should stay and renovate or sell up and move on.
Here are some of the things that you might want to take into account when you’re making your decision.
Renovate your home or move to a new one?
Remember that if you think you will still sell in the future, basic home renovations made now can not only improve your enjoyment of your home, but also increase the market value by about 10%.
The average cost of an extension in Ireland is €981 per sq. metre. If you live in Dublin expect to pay an average of €1,069 per sq. metre while in rural Ireland you should budget around €908 per sq. metre.
The average Irish spend on an extension is €25,495 according to onlinetradesmen.ie where you can request quotes for the work you’re planning.
By renovating instead of selling you are avoiding some of the hidden costs of moving home [KH1] like Stamp Duty, legal registration and estate agents' fees.
Get expert advice for your renovation
It is worth seeking expert advice from an architect or engineer before making grand plans for a home renovation. Their clever design ability might be able to provide you with everything you need within the 40sq metres you have to play around with without Planning Permission. Aim for a design that will avoid the need for tricky and time-consuming planning applications but make sure to get advice from a professional.
Renovating for energy efficiency
Renovating might not be as expensive as you think. If you choose to make energy efficient changes to the home, you may be eligible for a Better Energy Rating (BER) grant from the Sustainable Energy Authority of Ireland (SEAI). And in the long run, a greener home is a less expensive home and it should also have a better resale value as it will have a better BER rating.
At AIB, we offer a free BER Voucher for new AIB Home Improvement Personal Loans. To get your free voucher, you need to:
· Be approved for and drawdown a new AIB Home Improvement Personal Loan on our standard lending rates (up to €10,000 at 12.99% APR and over €10,000 at 9.99% APR) between 1st July 2015 and 31st December 2015. (Standard lending rates are available up to €50,000).
· Give us your email address.
We’ll email your voucher to you and you can redeem it with our AIB partners who’ll organise for a SEAI-certified BER assessor to call round and carry out the assessment.
Spend carefully on cosmetic updates
For smaller cosmetic updates, you may be able to carry them out yourself. For inspiration check out Pinterest and Houzz two international sites offering loads of interior ideas. But remember interior design can often be a money spending rabbit hole. It’s always a good idea to focus on the structure and energy efficiency of your home first and the decorative improvements later.
Get the most from an attic conversion
Think twice before creating an attic conversion if it will eat into the space in an existing bedroom to make room for the stairs. Also remember that the standard attic conversion is unlikely to meet building regulations without a significant spend so can’t be advertised as a bedroom in a subsequent sale.
If your home is suitable for attic conversion it is definitely worth considering. You should expect to spend at least €15,000 for a very basic conversion up to €25,000+ for a conversion with an ensuite. Costs work on a case by case basis, so enlist professional advice before you begin.
Invest in the kitchen
The kitchen is definitely the beating heart of the home, and most people will spend heavily on improving this space. However, before you set your heart on an extension consider reconfiguring the existing space.
Maybe you can knock one wall, add a pantry or remove an unused second dining area to give you the space you want. This will cost a lot less than adding on an extension.
When it comes to your budget for the cupboards, worktops, appliances and decoration for a new fitted kitchen the general rule is that you should not spend more than 10% of the total value of your home. So if your home is valued at €190,000 cap your new kitchen budget at €19,000 including VAT.
Don’t create dark spaces
Remember that a light, bright home is the one thing your family, not to mention future potential buyers, will enjoy the most. Be careful not to create cramped internal corridors or block light by extending badly.
Remember every home has a ceiling price
Dublin and larger cities are quickly bouncing back from the recession in terms of property prices. But you will still have a ceiling price for a 4-bed home in your neighbourhood which you need to remember if you are renovating from a three bed to a four bed.
In rural areas where property prices have been slower to rebound, no matter how much you extend or renovate, your house price may not increase dramatically. Keep this in mind by checking the property price register for the ‘ceiling price’ in your area before you cement (pardon the pun) your renovation plans.
Thinking of renovating your home?
If you are thinking of renovating your home instead of moving you may need a home improvement loan or mortgage. To get an estimate on how much you could expect to borrow with a loan, use AIB's loan calculator.
We’re backing doing
When Clodagh and Anthony were faced with the choice of moving or renovating to make space for Clodagh’s mum, they chose to renovate with a personal loan from AIB. With the renovation complete, Clodagh’s mum has a space of her own but is still a big part of their family. “I didn’t expect to have a house like this,” Anthony said.
“It’s fantastic to see the turnaround,” Clodagh agreed.
Watch Clodagh and Anthony's story on YouTube.
Allied Irish Banks, p.l.c. is an authorised agent and servicer of AIB Mortgage Bank in relation to origination and servicing of mortgage loans and mortgages. AIB Mortgage Bank and Allied Irish Banks, p.l.c. are regulated by the Central Bank of Ireland.