What is the Real Cost of Renovation?

We all know that property currently in Ireland is in short supply, But if we look around us 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” make hotlink for this https://scsi.ie/renovation-report/ that examines the
challenges faced by people seeking to buy and restore derelict or vacant buildings in Ireland.

The study looked at 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%.

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 https://scsi.ie/ recommends that feasibility grants be included under Croí Cónaithe
https://vacanthomes.ie/new-croi-conaithe-towns-fund-scheme/ 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.

Bandon based 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.”

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