It took a little longer to add the finishing touches, but the bulk of this self-build house in Ireland was completed on a single August bank holiday by architect Dominic Stevens and a group of friends.

At a time when people are struggling to get on the housing ladder, the story of Stevens's house in County Leitrim, 100 miles from Dublin, is a hopeful one. It is an exercise in compact design and (very) economical construction – €25,613 (around £21,000) for three bedrooms, a kitchen, bathroom and a spacious double-height living room.

Stevens opted to build his own house when he got divorced a few years ago. While he wanted to still be "within teenage walking distance" of his children, he couldn't afford anything locally without getting deep into debt. He is wary of the mortgage market – and with irresponsible lending largely to blame for the bursting of the Irish economic bubble, it's not hard to see why.

Let there be light: The living area is heated and lit from the picture window. Photograph: Ros Kavanagh for the Guardian

The house is made from a timber frame with tough, lightweight roof and walls called Onduline, which looks like corrugated iron but is made from plants. Painted black, it resembles a small, dark barn – "Black makes the house disappear into the landscape," he says. There's a blue front door on the side, a few small windows, and a large, south-facing window. It is designed to echo the proportions of a traditional Irish cottage – indeed, Stevens sees it as being rooted in his country's strong self-build heritage.

Inside, like a ship's cabin, it makes clever use of very little floor space. Off a small, green hallway are two small bedrooms and a shower room. The living space, heated and lit from the picture window, has a seating and dining area, as well as a kitchen "pod", painted blue. Entwined around it are stairs leading to a master bedroom, with books housed neatly in the treads. Each room is colour coded to help define them and make them feel larger. Furniture is picked up cheaply: a set of red Eames canteen chairs from a US airbase in Germany that was closing down; a pair of pouffes from Ikea.

Stevens has made the kitchen area stand out from the main living area with a clever lick of paint. Photograph: Ros Kavanagh for the Guardian

The walls are insulated with a soy-based foam sprayed in the cavity: last winter, temperatures dropped to -15C, but the house stayed warm, heated by only a 1.5kw Dimplex heater (still the only source of heat).

Stevens lives in the house and runs his architecture practice from it. His new partner, Catherine, and his two children are frequent visitors. Despite all this activity, space gets a little cramped, Steven insists, only if there is a big meal to be cooked. "You can't have more than one person in the kitchen at a time – someone has to be on chopping duty at the table." He will, however, modestly extend the house when the children get a little bigger.

Stevens has made the plans for the house available to anyone who wants them (download them from irishvernacular.com) and hopes others will follow his lead and build their own houses. It can be built almost entirely using unskilled labour (although he does admit that you will need to have, or hire, someone who has good carpentry skills to build the frame). But he advises anyone following his plans to hire an architect to assist with planning permission. "The actual building is not the challenge, it's the bureaucracy that surrounds it."

As an architect, Stevens says he would prefer his legacy to be a generation of inspired self-builders rather than a raft of towering structures. "Passing on to my children the skills to build a house is more precious than giving them a property." Tellingly, the locals in this rural area have been largely approving. "Many people around here also built their own homes," Stevens says, "so they understand what I'm doing. They also look at it practically – if you've built a warm, dry house in what is a very damp part of the country, then that's pretty good with them."