House Hunter: 'I love Donegal, but not bungalows'

THE PROBLEM

THE PROBLEM

Alexander Pym of Twickenham writes: I want to buy a holiday home in the Republic of Ireland, but it must be close enough to the border with the North for me to fly to and from Belfast.

I intend to keep a car over there, so the home should be within a 60-minute drive of Belfast airport at most. Donegal in the north-west is my favourite part of the republic.

The house can be old or new (there seems a lot of new-build going on in Ireland), but there is one important pre-condition: the property must be two storeys or more.

I love Ireland and its people, and most of my ancestors are from there, but I am not a fan of the bungalows that now seem to be spreading across the Irish countryside with reckless abandon. Is there no adequate town planning in Ireland?

I would like to spend only €150,000 (about £100,000), but if the property was particularly good I could go to €250,000. Is the market rising or falling in Ireland? If it is dropping slightly, as it is here in the UK, I may wait until 2006.

Please also let me know if the buying process is the same as over here, and if there are any additional charges or problems for non-Irish citizens buying in the Republic.

THE ADVICE

Graham Norwood writes: Like much of Ireland, Donegal has more than its fair share of bungalows. Ireland has a relaxed attitude to housing density compared to the UK, and the population in rural Ireland is older than average. Builders and buyers are therefore keen on bungalows, and they form about 40 per cent of all new homes.

"But there is still plenty of choice if you want a house. Although a typical Donegal property has tripled in value in the last 10 years, prices in the county remain among the lowest anywhere in Ireland. They range from €100,000 for a small terraced house with a small garden, to more than twice that amount if you want a detached property with a larger garden. Most new-build homes in the county are €230,000 or higher.

"UK residents form a large expat community in Donegal, because its west coast is a popular second-home area for Belfast residents. Donegal Bay and the nearby countryside are rugged, and there are small towns and villages with plenty of individual homes dotted around. Donegal town and its famous triangular market-place, known as The Diamond, are regarded as one of the most beautiful locations in Ireland.

There is no restriction on foreign ownership of homes in the Republic of Ireland and the buying system is similar to ours.

A 10 per cent deposit is usually paid to the vendor's solicitor at the time of exchanging contracts, binding buyers to complete the purchase. A conveyancing solicitor is required to check contracts and initiate searches.

The fees for buying a property in Ireland will normally total between 6 per cent and 10 per cent of the buying price, although may exceed that for very large homes.

Charges include legal fees of about 2 per cent of purchase price, plus small fees for the Irish land registry. New properties will also incur VAT and the Irish government announced late last year that a typical new-build home costing €300,000 now includes more than €80,000 of tax.

Stamp duty is charged for buyers who have bought a home previously in Ireland, or whose first property in the Republic is a second-hand home - this is scaled against the purchase price and can be as high as 9 per cent if your home is expensive.

If you require a mortgage from an Irish bank the maximum loan will be 90 per cent of the property value with a maximum 30-year term. Some mortgages also involve an additional stamp duty payment.

THE SOLUTION

Property one: Detached house with 1.5 acres of space.

Price: €295,000.

Agent's details: This house is tucked away in the Donegal countryside with outstanding views. A winding driveway with lawns on either side leads to the four-bedroom house. Inside are mahagony doors, maple floors and wooden balconies looking over the gardens which include a play area.

Agent: Martin McGowan Property, 0035 3 7491 900 90.

Property two: New semi-detached house close to the west coast.

Price: €250,000 (£175,000).

Agent's details: Faugher Court is five new two-bedroom houses at Portnablagh, 200 yards from Sessiagh Lake and close to three of Donegal's best known beaches. The interiors feature Scandinavian hardwood windows, gas-fired central heating and underfloor heating downstairs.

Agent: Franklins, 0035 3 74 9188 000.

Property three: Two-bed house in Ballybofey.

Price: €130,000.

Agent's details: Ballybofey is off the tourist route, so properties are better value here. This slate-roofed two-bedroom townhouse is about a five minute walk from the town centre and has a spectacular 200-foot rear garden.

Agent: Martin McGowan Property, 0035 3 7491 900 90.

FACT FILE: DONEGAL

THE AVERAGE Donegal property now costs €199,970, (£139,000) but potential buyers should not defer purchasing, because new homes are likely to be even more expensive in a year's time.

According to the Irish government official figures, the country's house prices grew by an average of 8.6 per cent during 2004, down significantly on the 13.8 per cent price growth in 2003. But last year Donegal's prices rose much more - they were up 16 per cent, easily the largest rise anywhere in the Republic.

This was due to a glut of new building at above-average values and because high demand for sea-view homes generated higher than expected offers.

Donegal's property market has also been pepped up by the relocation of 230 civil service jobs from Dublin to the town.

The Royal Institution of Chartered Surveyors' European survey 2005, just released, suggests that the Irish market will cool this year, although once again areas with second homes and high levels of tourism are predicted to show above-average hikes.

If you would like House Hunter's help in finding a property in the UK or overseas, write to: The Independent, 191 Marsh Wall, London E14 9RS, 020-7005-2000 or e-mail: househunter@independent.co.uk