By Mark Kirby
For generations, building a home on family land has been a familiar route to home ownership, particularly in rural Ireland. With house prices continuing to rise and housing supply remaining tight, more people than ever are now considering buying a site and building their own home as a practical way of entering the property market. For many families, this can also provide an opportunity for adult children to gain independence without moving far from home, or to install a modular unit where there is suitable space on an existing family property.
The Government is now proposing changes to planning policy aimed at creating a more consistent approach across all local authorities, replacing the current ‘location lottery’ with a unified national planning framework that provides greater certainty for applicants. The proposed amendments would ease local housing need restrictions by expanding eligibility to include economic need as well as those working in farming, forestry and essential public services such as teaching and nursing. They would also remove blanket bans on ribbon development and eliminate limits on the number of homes that can be built on a family farm. In addition, under exceptional personal or health circumstances, elderly people wishing to downsize and families caring for a person with a disability could build a home of up to 90 square metres within the site boundary of the original family home. These homes would be subject to conditions, including that they must be used as the owner’s primary residence for a minimum of 10 years and cannot be used as short-term rental accommodation.
The shift has brought renewed attention to self-build mortgages, planning rules and government supports, It has also made the process more complicated, as the cost of construction, land, and professional fees can push many projects beyond what families can afford.
Over the past few years, the cost of building a home has increased significantly. As a result, some people who had planned to self-build are now being told they can no longer afford to do so and should consider buying an existing property instead. In some cases, the total cost of a self-build has even exceeded the market value of the completed home.
Anyone considering building a home should begin by setting a realistic budget. The first step is to speak with a mortgage broker to establish your borrowing capacity before engaging with an architect or engineer. Understanding how much you can borrow, together with your total available budget, allows you to work backwards and plan a home that is financially achievable.
Having a clear budget from the outset helps shape the house design around what is realistically affordable rather than what is aspirational. It is also worth asking your architect or engineer to prepare a ‘gold-plated’ design that includes all of your desired features, with each item individually costed. This allows you to identify where savings can be made during the initial build while ensuring the design can accommodate those features in the future if your budget allows.
Planning permission remains a key step in most self-build projects. A mortgage application generally cannot proceed until conditional planning permission has been granted, and lenders will also want to review the specific conditions attached to that permission.
One of the most significant recent changes to Ireland’s planning system is the introduction of new exemptions for modular homes, which came into effect on July 27, 2026. The measures are designed to make it easier for homeowners to create additional living space by allowing standalone modular homes in back gardens, larger home extensions and, in certain circumstances, the subdivision of existing homes.
Under the new rules, detached garden units, often referred to as ‘granny flats’, of between 32 and 45 square metres can now be built for family use without planning permission, provided they do not have a separate utility connection and are not used for short-term letting. The maximum size of exempt rear house extensions has also increased from 40 square metres to 45 square metres, with any previous extensions taken into account when calculating the total floor area.
The changes also allow an existing home to be divided into two self-contained units, each with a minimum floor area of 32 square metres, provided the development meets the specified criteria. In addition, the exemption threshold for general garden structures, such as home offices and outbuildings, has increased to 30 square metres.
The new exemptions are subject to a number of conditions. They apply only to construction carried out between July 27, 2026 and December 31, 2030. The main house must retain at least 25 square metres of private outdoor space, although there is ongoing debate about how this requirement will be interpreted, as the total includes both front and rear outdoor areas. Other requirements, including minimum distances from septic tanks where applicable, must also be met. Detached garden units must maintain a minimum 0.6-metre setback from walls and property boundaries.
Government supports are available for some self-build projects, although qualifying has become more challenging. The Help to Buy Scheme can be used for self-builds, but applicants must still meet the scheme’s lending criteria. In practice, this means the loan-to-value calculations must align with the valuation of the completed property. Borrowers must take out a mortgage of at least 70 per cent of the completed property’s value, and the completed home cannot be valued at more than €500,000.
The First Home Scheme may also be available for some self-builds, although it is subject to property value limits and other eligibility criteria. For applicants who are unable to borrow enough through the main pillar banks, a Local Authority Home Loan may provide an alternative, depending on the borrower’s circumstances and the value of the property. Maximum property value limits vary between local authority areas.
For anyone considering a self-build, the key message is that it remains an achievable route to home ownership, but it requires more careful planning than ever before. Rising construction costs, stricter lending criteria and planning considerations mean prospective builders need to do far more research before committing to a site or finalising a design.
Modular homes may offer a faster solution in some cases, particularly in light of the recent planning changes. However, buyers should not assume they are exempt from planning rules or other regulations. The best approach is to have your budget, planning position and finance fully in place before construction begins.
Whether you are planning to build your forever home, create a garden home for an adult child or develop additional accommodation to generate rental income, Moneytree can help you identify the lender best suited to your circumstances. Whatever your project, we can guide you through the available lending options and help you find the mortgage solution that best fits your needs.
If you have any questions, please contact the Moneytree team on 023 881 0001.
