'Begin to Buy' Scheme - to replace "affordable housing"

MiaMia

I have been on to Labour - about the sham that is the new affordable Housing Initiative excluding people who earn less than 45K.

Their response is to a new "Begin to Buy" scheme (in blue below). I was wondering what people thought of it? Is it financially possible for the state to fund this?

It looks to me like a better more flexible version of shared ownership scheme. I do like that it is not exclusivley for first time buyers - therefoe if you have bought yourself a dog box sized one bed, fall in love and have kiddies but still haven't managed to acheive that 70K salary, there is still hope!

Anyway their exact wording is in blue below.

Labour is committed to a ‘Begin to Buy’ scheme which will enable every working household to begin buying a home of their own, or to trade up to a home to meet their family needs.

Under this plan, the couple will be able to get a mortgage to cover a proportion of the cost of the house. The Govt will guarantee the balance of the loan taking a proportionate stake in the property. The couple will be able to gradually take full ownership of the property over the lifetime of the mortgage.

Our proposal will end the culture of exclusion that has become part and parcel of our residential property market.

jam_mac_jam

MiaMia wrote:

I have been on to Labour - about the sham that is the new affordable Housing Initiative excluding people who earn less than 45K.

Their response is to a new "Begin to Buy" scheme (in blue below). I was wondering what people thought of it? Is it financially possible for the state to fund this?

It looks to me like a better more flexible version of shared ownership scheme. I do like that it is not exclusivley for first time buyers - therefoe if you have bought yourself a dog box sized one bed, fall in love and have kiddies but still haven't managed to acheive that 70K salary, there is still hope!

Anyway their exact wording is in blue below.

Labour is committed to a ‘Begin to Buy’ scheme which will enable every working household to begin buying a home of their own, or to trade up to a home to meet their family needs.

Under this plan, the couple will be able to get a mortgage to cover a proportion of the cost of the house. The Govt will guarantee the balance of the loan taking a proportionate stake in the property. The couple will be able to gradually take full ownership of the property over the lifetime of the mortgage.

Our proposal will end the culture of exclusion that has become part and parcel of our residential property market.

I think this is another stupid idea. All you are going to do with this is put more money into the system to push up prices for everyone else who doesnt qualify. It will make the problem worse.

Decent tennant rights like the rest of Europe and a regulated rental market would be a better start. Yes I know buying a house is usually better for families but there are plenty of people all over Europe who live in rented houses for all their lives and it's not the end of the world.

MiaMia

jam_mac_jam wrote:

I think this is another stupid idea. All you are going to do with this is put more money into the system to push up prices for everyone else who doesnt qualify. It will make the problem worse.

Decent tennant rights like the rest of Europe and a regulated rental market would be a better start. Yes I know buying a house is usually better for families but there are plenty of people all over Europe who live in rented houses for all their lives and it's not the end of the world.

Yes I agree that a regulated rental system does work in Europe and infact did work in Ireland in the past - my mothers family home was a 99 year lease, the family inherited the key, and rent was controlled.

But is anyone in Ireland going to accept this?

More questions:

The PDs say substantially reduce stamp duty - will this help anyone? What would it do to the housing market?

Has anybody a better idea??? This may be the time to bring it to the attention of the Politians !

jam_mac_jam

MiaMia wrote:

Yes I agree that a regulated rental system does work in Europe and infact did work in Ireland in the past - my mothers family home was a 99 year lease, the family inherited the key, and rent was controlled.

But is anyone in Ireland going to accept this?

More questions:

The PDs say substantially reduce stamp duty - will this help anyone? What would it do to the housing market?

Has anybody a better idea??? This may be the time to bring it to the attention of the Politians !

I dont think Ireland has any other option but to accept this, if houses stay this expensive (which is another debate) then we will have to rent. In the same way as London you just will have no choice.

On the stamp duty thing, its not going to happen so its not really even worth worrying about.

Cantab.

jam_mac_jam wrote:

I think this is another stupid idea. All you are going to do with this is put more money into the system to push up prices for everyone else who doesnt qualify. It will make the problem worse.

Decent tennant rights like the rest of Europe and a regulated rental market would be a better start. Yes I know buying a house is usually better for families but there are plenty of people all over Europe who live in rented houses for all their lives and it's not the end of the world.

I agree. It's an electioneering ploy - "Anything you can do, I can do better" style. Auction politics at its worst.

This move by the labour party could go even further - they might even de-stabilise the affordable homes market. Imagine if people believed Labour/FG was a real possible alternative government: FTBs would hold off until after the election before taking a plunge into the affordable homes initiative. It's a nasty combination (politics and money) and I don't like the smell of it one bit.

The solution is simple: sort out the rental sector and pass zoning over to an independant body (the councils have proved their ineptitude/incompetence/corruption for too long now). Although I fear it may all be too late. The damage has been done.

mentalson

an absolutely dreadful idea from Labour and one that I think will lose them more votes than it will gain them . Its basically pumping lots of money into the housing market. This will benifit developers and and those who are selling investment properties but make things even more difficult for those struggling to buy. With this iniatative Labour has repositioned itself as a right of centre party.

The PDs iniatative will benifit speculators only as the vast majority of FTBs already pay no stamp duty.

Gurgle

jam_mac_jam wrote:

All you are going to do with this is put more money into the system to push up prices for everyone else who doesnt qualify. It will make the problem worse.

Its actually quite clever - Make it look like your doing something for the lower (younger) middle-class voters while 'inadvertantly' appeasing fears of a crash for those with vested interests.

tbh, this scheme is as practical and long-sighted as the SSIA idiocy

jam_mac_jam wrote:

Decent tennant rights like the rest of Europe and a regulated rental market would be a better start. Yes I know buying a house is usually better for families but there are plenty of people all over Europe who live in rented houses for all their lives and it's not the end of the world.

I agree in principle, but where would you even start with regulating the rental market here?

Calina

The first thing you could start by doing is removing Sale of property or occupation of property by family as motives for ending a Part VI tenancy. One of the big issues in the rental market in Ireland is the movement of property from the rental market to the property sales market.

At the moment, the problem is this: the property sales market is massively out of kilter economically both in terms of value:salary and rental yields. It needs a correction back to fundamentals which are, roughtly speaking, average house value being something like 6 times average salary and average rental yields being somewhere between 7% and 10%. Until that market correction happens, any messing with the property sales side of things will do little to alleviate the main problem which is that property is too expensive.

In terms of enabling people to buy property - we need to make the process seamless - I haven't done it yet, but it seems to be quite complex, and there appears to be quite a bit of messing around. Fiscally, though I don't think there is a huge amount that needs to be changed although people yammer on about stamp duty.

Ultimately, the key thing which really needs to be sorted out is the credit side of things. Banks are lending far too much money at the moment and they have been allowed to smash through guidelines with relative impunity until the Financial Regulator threw a doozie at the EBS a week or two ago about diluting their stress testing. Mortgage lending could be regulated a little more effectively.

Realistically, if and when the property market corrects, a lot of people are going to get hurt. That they are in that position though, is not something that they can absolve themselves of responsibility. Banks may lend too much, but people borrow too much too...

KingKenny7

Run that by me again.....

Can you not get affordable housing if you earn under 45k a year????

That rules out all my mates, who have their own houses anyway.....

I earn slighty about that and I got a mortage of 300k, with a few to it rising, coz my wages will rise soon...

Gurgle

Calina wrote:

average rental yields being somewhere between 7% and 10%.

If rental yields were higher than interest repayments, then everybody who can put the money together invests in a rental property. Even without capital appreciation it pays for itself.

Thats the situation that led to over a decade of massive house price rises.

House prices can only stabilise with rental yield being approx. equal to the interest rate.

Calina

Gurgle wrote:

If rental yields were higher than interest repayments, then everybody who can put the money together invests in a rental property. Even without capital appreciation it pays for itself.

Thats the situation that led to over a decade of massive house price rises.

House prices can only stabilise with rental yield being approx. equal to the interest rate.

No - what led to massive houseprice inflation was the expectation of capital appreciation. No one has been interested in rental yield here for years. Rental yields are and have been below the rate of inflation for about 6 years now and even so, last year, 40% of buyers were investors.

SkepticOne

All the parties seem to be advocating pumping money in one way or another into the overheated market as a solution to the problem. The bubble will be kept going at all costs - and I think the parties know this - because a burst, although the most beneficial to the economy, will lose the most votes.

KingKenny7

SkepticOne wrote:

All the parties seem to be advocating pumping money in one way or another into the overheated market as a solution to the problem. The bubble will be kept going at all costs - and I think the parties know this - because a burst, although the most beneficial to the economy, will lose the most votes.

Next time a dude in a suit come looking for votes, you should ask him this....
"why is it only in the past few years we have shared ownership, affordable housing?"

Didnt it use to be the way that if you are broke (unemployed,single mother, etc etc) you got a council house or they paid your rent in another place, and if you had a job which paid more the then social it was buy your own house and you could afford it.

It seems the they sat down over a few pints, and said......

Any Politician:- House prices are rising rapidly, the punters will need to earn above the avergae wages to buy one. What will we do?

Bertie:- If we lower house prices, we wont get as much stamp duty, then my supply of make up will suffer therefore effecting my going on on public, which will haev a huge knock on effect with the lads in Fagans. So lets buy the houes on the cheap, they price they should be, from our builder friends, then charge the punter only have for the house, and stick in a few term and cond, that will make sur we get the full very overfalted price.

Thats how it happened according to me, and I;m probably right too

jesus_thats_gre

MiaMia wrote:

I have been on to Labour - about the sham that is the new affordable

What pisses me off more is that the cut off point for a couple is 100k a year..

Tea drinker

Not being a home owner myself I would have to agree with a policy which helps me get my choice of home.
We don't qualify for the other schemes, and have "wasted" a huge amount of cash over the years on rent, not having deposit kinda excluded us, and if this exclusion is lifted great, don't want to see others in same situation as us, getting old without a home.

I do see the "auction" politics as generally harmful to Irish economy.
Relying on politicians to come up with good ideas is quite naive though.

With all due respect to the politicians on boards here, the only good ideas they have are the ones which save their necks or are for their own good.
What would any of them know about running a country? Where are their qualifications? Where is their job description? What entitles them to hold these positions apart from being a good talker?
Also, we all squawk about U.S. electing GB again, but we do the same with our own politicians. What's the diff?
Of course they are ALL jumping on the housing bandwagon now. One of them started it a few months ago with the stamp duty thing, and yeah, like a bunch of crows they are all at it now.
Sickened.:(

Gurgle

Calina wrote:

No - what led to massive houseprice inflation was the expectation of capital appreciation.

That was kind of the second phase of house price growth.

The first phase came from the situation where, if you had acces to finance you could buy a house/appartment and rent it out for more than your monthly mortgage payments.

With increasing availability of finance, this led a lot more people to jump on the bandwagon. This was the main factor that started the enormous rises in house prices.

Then phase 2 kicked off with 10s of thousands of people seeing a fast growth in prices and they jumped in as speculators.

hmmm

This is just a direct transfer of money from taxpayers to property owners and developers. A stupid idea couched in terms of "helping people get on the ladder".

The best thing for any government to do would be to regulate the sale and rental markets adequately, and stop handing over our cash to their pals.

Cantab.

hmmm wrote:

This is just a direct transfer of money from taxpayers to property owners and developers. A stupid idea couched in terms of "helping people get on the ladder".

The best thing for any government to do would be to regulate the sale and rental markets adequately, and stop handing over our cash to their pals.

That's it in a nutshell. :cool:

Tea drinker

Well, there is a lot of taxpayers money (rent) already being paying directly to investors/developers, by people like me, with no permanent gain (to me). It could be argued that my money is being spent unwisely! But when you did not have enough cash / rich family / inheritance you have no choice but to go to work and protect others investments.
If the Gov have a scheme where I can dare I say it - "get on the property ladder" - breaking the cycle of "dead money" then I am in favour of it.
I have spent many years paying rent, in fact, my age will become a factor in getting a mortgage soon enough, so my exclusion from property ownership may become permanent.
Now don't get me wrong I fully understand the politicians are desparate to sell themselves and differentiate from all the other grey suits.
Unfortunately for me, they didn't get get off their massively swolen rumps a few years ago to help me. Now they are all racking their little brains and trying to "Nostradamus" their way through boozy afternoons in the Dail to a vision of the future. Their future.

hmmm

Tea drinker wrote:

Well, there is a lot of taxpayers money (rent) already being paying directly to investors/developers, by people like me, with no permanent gain (to me).(

I'd like to own a BMW as I feel that paying bus fares is dead money, but I don't expect the taxpayer to subsidise my purchase.

Tea drinker

hmmm wrote:

I'd like to own a BMW as I feel that paying bus fares is dead money, but I don't expect the taxpayer to subsidise my purchase.

Comparing apples and sour grapes my friend! What has that got to do with home ownership? Owning a home and renting a place to live have no comparison in terms of added stability etc. At the end of the day, you are talking about a means to get around, and indeed the bus will continue to do that. a car is a luxury.
But I don't want to be forced to pay rent to a landlord when I am 70, I want the stability of my own home. A car has nothing to do with stability in later life, if you don't like buses, you can take a taxi. (if you are not spending all your money on rent) Having already suffered a serious illness I can see a diminishing window of opportunity to purchase a house. I will pay serious money for insurance alone, so I am double f*cked. Try paying medical bills and rent as well. Dead money takes on a new meaning:eek: !

Do you see what I mean? I want a stable environment to grow old in, and share with my wife, not wonder what's happening to the rental market, when landlord will want to re-decorate to get more money from next tenant, move to another place etc. That's a nightmare really. There is SFA regulation in the rental market yet guys consistently say home ownwership is a luxury. It is not. Not if you want stability, and not if you want to plan for the future.

Correct me if I'm wrong, Is the taxpayer NOT subsidising the hell out of the the transport system for years? Anyway, You may have the option to walk or cycle. Myself and wife could always sleep on the street too!
Are taxpayers like me on 42% not paying for council schemes of all sorts all over the country? but if you earn a semi decent wage you are excluded? Why can't it be my turn now? Did the goverment inaction not cause the housing bubble? Now I want the government to do something about my situation for me... just like everyone else... but like I said, my turn now.:)

MiaMia

jesus_thats_gre wrote:

What pisses me off more is that the cut off point for a couple is 100k a year..

Sorry I'm confused here - do you think its to high or too low? I am assuming you may be mixed up the way I was mixed up??? I thought the total income for a couple was 100K infact the rule is below.


If there are 2 people earning an income, then the eligibility is slightly different, as follows: Add 2½ times the larger income plus 1 times the smaller income. If the total does not exceed €100,000, then you are eligible to apply.

Therefore if they have a single income of 40K 40 * 2.5 = 100K - qualify
or two inccomes of 25K each (25*2.5) + (25 *1) = 87.5K - qualify
or two incomes of 35K and 5K (35*2.5) + (5 * 1) = 112.5K - don't qualify

Its a very weird calculation - don't know why they can't just add the salaries together but there may be method in the madness somewhere???

Cantab.

Tea drinker wrote:

Comparing apples and sour grapes my friend! What has that got to do with home ownership? Owning a home and renting a place to live have no comparison in terms of added stability etc. At the end of the day, you are talking about a means to get around, and indeed the bus will continue to do that. a car is a luxury.

Owning a home is a privilige. A roof over your head is not. You are not magically entitled to a personal wealth of 300k (the value of the average Irish home).

Tea drinker wrote:

But I don't want to be forced to pay rent to a landlord when I am 70, I want the stability of my own home.

Well go and buy a house then, and stop expecting the taxpayer (i.e. me) to pay for it. If you want a retirement of luxury, then I'm sorry, but you'll have to pay for it. Otherwise, there is basic state retirement accomodation for you to avail of.

Tea drinker wrote:

A car has nothing to do with stability in later life, if you don't like buses, you can take a taxi. (if you are not spending all your money on rent) Having already suffered a serious illness I can see a diminishing window of opportunity to purchase a house. I will pay serious money for insurance alone, so I am double f*cked. Try paying medical bills and rent as well. Dead money takes on a new meaning:eek: !

You somehow think you are entitled to an old-age of luxury. If this is what you want, then work for it, start a pension (there is huge tax relief for this), invest or save.

Tea drinker wrote:

Do you see what I mean? I want a stable environment to grow old in, and share with my wife, not wonder what's happening to the rental market, when landlord will want to re-decorate to get more money from next tenant, move to another place etc. That's a nightmare really. There is SFA regulation in the rental market yet guys consistently say home ownwership is a luxury. It is not. Not if you want stability, and not if you want to plan for the future.

Sorry, but that is a load of drivel. If you buy a house you have to worry about what's happening with regards interest rates.

Tea drinker wrote:

Correct me if I'm wrong, Is the taxpayer NOT subsidising the hell out of the the transport system for years? Anyway, You may have the option to walk or cycle. Myself and wife could always sleep on the street too!
Are taxpayers like me on 42% not paying for council schemes of all sorts all over the country? but if you earn a semi decent wage you are excluded? Why can't it be my turn now? Did the goverment inaction not cause the housing bubble? Now I want the government to do something about my situation for me... just like everyone else... but like I said, my turn now.:)

Nobody is suggesting you will be left to live on the street. You are earning enough money to be paying 42% tax, so you should really stop complaining and take responsibility for your own destiny. The government this, the government that - you are sound like a big baby waiting for mommies milk when you are perfectly capable of going out in to a booming economy with full employment. You want mommies milk, when there is champagne to be grabbed from the lower branches.

MiaMia

hmmm wrote:

I'd like to own a BMW as I feel that paying bus fares is dead money, but I don't expect the taxpayer to subsidise my purchase.

Firstly Affordable Housing is not top of the range in the very best of Dublin 4 housing (as em discussed/ranted at length in another thread). So you should have said something like - I'd like to own a second hand Nissan Micra as I feel that paying bus fares is dead money, but I don't expect the taxpayer to subsidise my purchase.

Secondly - unless someone stays longer than tenyears in affordable housing - they have to pay the government back as a clawback. This happens even if they want to refinance to get some homeimprovements done - or heaven forbid simply change mortgage company to take advantage of reduced interest rates.

If they stay ten to twenty years - they pay a reducing scale back.

If they stay twenty years - they will be a rarity as most of the property is 2 bed apartments - and I assume most people will eventually have families.

Therefore in the majority of cases people are getting an interest free loan - This is no different than all of the people on high incomes taking advantage of 48% tax relief on pension, getting section 23 relief etc.

And remember just because we are on lower incomes does not mean we work any less hard than you - just ask one of the bus drivers how much fun it is to get abused by a drunk on a bus etc

MiaMia

Cantab. wrote:

Owning a home is a privilige. A roof over your head is not. You are not magically entitled to a personal wealth of 300k (the value of the average Irish home).

Well go and buy a house then, and stop expecting the taxpayer (i.e. me) to pay for it. If you want a retirement of luxury, then I'm sorry, but you'll have to pay for it. Otherwise, there is basic state retirement accomodation for you to avail of.

You somehow think you are entitled to an old-age of luxury. If this is what you want, then work for it, start a pension (there is huge tax relief for this), invest or save.

Sorry, but that is a load of drivel. If you buy a house you have to worry about what's happening with regards interest rates.

Nobody is suggesting you will be left to live on the street. You are earning enough money to be paying 42% tax, so you should really stop complaining and take responsibility for your own destiny. The government this, the government that - you are sound like a big baby waiting for mommies milk when you are perfectly capable of going out in to a booming economy with full employment. You want mommies milk, when there is champagne to be grabbed from the lower branches.

Okay - grow up and stop ranting. I'm sorry the government didn't give you the house of your dreams. You afterall are the person who believes that Affordable Housing is crap and that you will live in the worst area ever.

The truth is they are in the working class areas as a rule.

Unless you stay longer than ten years - you are only getting an interest free loan - see prevous post.

300K??? you do pay for like most of the house 80% - if you are on AHI.

And you personally are happy renting (I used to be when I was 25 and living in Ranelagh)-don't be so bitter towards people who have dreams!

I hope you will be just as happy paying tax for my retirement home when your fifty though - they are far more expensive than you think.

Cantab.

MiaMia wrote:

...don't be so bitter towards people who have dreams!
...

If a home of your dreams is a 2-bed flat at the end of the Malahide road, well, that's a sad state of affairs. You'd probably be better off getting yourself pregnant, quitting work and going on state benefits (there are some half-decent council houses around the Pearse Street/Upper Rathmines Road areas). You could even start work on that novel you've always dreamt about writing.

Tea drinker

Ahh, Here we go again. Tell the slaves to go easy on the incense, the fumes must be gettin to you again. How many people will you insult this time Cantab?

Cantab. wrote:

Owning a home is a privilige. A roof over your head is not. You are not magically entitled to a personal wealth of 300k (the value of the average Irish home)..

I don't want anyone to pay the mortgage for me, just get me started. Where did I say I wanted it paid for? Show me where I said it please. please please....

Cantab. wrote:

Well go and buy a house then, and stop expecting the taxpayer (i.e. me) to pay for it. If you want a retirement of luxury, then I'm sorry, but you'll have to pay for it. Otherwise, there is basic state retirement accomodation for you to avail of..

I bet I have paid way more tax than you big guy. BTW, is the state retirement accommodation you recommended as good as the state medical service? You might end up in hospital yet....

Cantab. wrote:

You somehow think you are entitled to an old-age of luxury. If this is what you want, then work for it, start a pension (there is huge tax relief for this), invest or save..

Cheers for the financial advice man. Ehh, I am paying into a pension, have a few other bits and pieces that are none of you beeswax.. BTW I have heard a lot of people saying buying a home at the moment is a bad investment, check into that one, I know I have.

Cantab. wrote:

Sorry, but that is a load of drivel. If you buy a house you have to worry about what's happening with regards interest rates..

Ehh, but but ehh it's not a load of drivel!!!! as you potentiall have something to show for your money, over and above that of paying rent.
Is that not clear?
I agree interest rates are always a worry. If interest rates are going up - guess what rents could easily rise, I know you knew that already.

Cantab. wrote:

Nobody is suggesting you will be left to live on the street. You are earning enough money to be paying 42% tax, so you should really stop complaining and take responsibility for your own destiny. The government this, the government that - you are sound like a big baby waiting for mommies milk when you are perfectly capable of going out in to a booming economy with full employment. You want mommies milk, when there is champagne to be grabbed from the lower branches.

I didn't say someone suggested I live on the street. again, show me where I said this? I made a comparision between a luxury, and something that is not a luxury. How did you not see this? You also recommended mommies milk. Let me say I definitively do not want your mommies milk, I would say it ain't too good. And the Champers, you keep it.

jesus_thats_gre

MiaMia wrote:

Sorry I'm confused here - do you think its to high or too low? I am assuming you may be mixed up the way I was mixed up??? I thought the total income for a couple was 100K infact the rule is below.


If there are 2 people earning an income, then the eligibility is slightly different, as follows: Add 2½ times the larger income plus 1 times the smaller income. If the total does not exceed €100,000, then you are eligible to apply.

Therefore if they have a single income of 40K 40 * 2.5 = 100K - qualify
or two inccomes of 25K each (25*2.5) + (25 *1) = 87.5K - qualify
or two incomes of 35K and 5K (35*2.5) + (5 * 1) = 112.5K - don't qualify

Its a very weird calculation - don't know why they can't just add the salaries together but there may be method in the madness somewhere???

I have not done anything more than glance at some material on the subject so forgive me if I am wrong. I was under the impression that as single person had to be earning less than 40k a year to qualify while a couple had to earn less than 100k between them.



EDIT: having just read this, it is clearer.

http://www.citizensinformation.ie/categories/housing/buying-a-home/help-with-buying-a-home/affordable_housing_scheme/?searchterm=affordable%20housing

I obviously misread something the previous time.

hmmm

MiaMia wrote:

And remember just because we are on lower incomes does not mean we work any less hard than you - just ask one of the bus drivers how much fun it is to get abused by a drunk on a bus etc

Why do you assume you're on a lower income than me? I have issues with my tax money going to pay for someone else's lifestyle choice. People are not going homeless, but they dislike paying rent - why is this my problem and why should I pay for them to get their own house?

Someone mentioned here that you are "only" getting an interest free loan. Let's say a 200k interest free loan, that's about 9k a year of taxpayers money going towards subsidising someones lifestyle. I'd rather that went towards the more worthy in society.