affordable housing offer

artie ziff

has anyone had the experience of refusing an affordable home? i'll be viewing one in citywest tommorrow but it does not look like it suits. what i'm really trying to find out is: what are the odds that i will be offered a better home if i refuse the first?

some of you will probably be thinking the begger/ chooser analogy which i understand, i'm just trying to get the best i possibly can with very limited resources.

btw. this is my first time on this website so if i've done something stupid please point it out to me

Posy

I'd recommend you have a look through the other posts on affordable housing as well. What are you viewing- an apartment, yeah? If it's Fingal CoCo; you don't get penalised for turning down an offer but if it's your first viewing I doubt you'll even be high enough on the list to get an offer.
Usually, if you hold out for what you want you'll get it eventually, but it might take another 1-2 years on the list depending on what you want and where. Three bedroom houses are especially rare. I don't think beggars/choosers applies here. It's the biggest investment you'll ever make and you're entitled to be fully satisfied with it.

The_Conductor

Following recent court actions (particularly Dunlaoghaire Rathdown's current problems), its increasingly likely that the various Co.Co's will no longer be as willing to take money in-lieue of affordable houses from developers. So- in theory there should be a better supply of properties available on the affordable housing schemes in the future. Obviously a lot of these are apartments, and for the most part are not ground floor or top floor apartments, that developers have not the same issues trying to find buyers for.

If its not suitable- irrespective of the price, do not buy it.

S.

Trinity

I think the only penalty is that you go back down the bottom of the list (if its a waiting list system)

Dont feel pressured into taking it though, the right one will come along if you are willing to wait!!

Good luck today.

podge018

No penalty with Fingal, you the property gets offered to the next in line and you stay where you were on the list. I turned down one in Lusk, a week later I was offered one in Meakstown, delighted.

Daith

With DCC they mentioned that if you turned down three offers you'll be frozen (i.e. won't be included in the lottery) for a number of months.

artie ziff

thanks folks.
as it turns out i bought the apartment on the spot. the developer told me that i could possibly be moving in as early as august so time to get my skates on with regard to getting a solicitor/ getting final approval and so on

thanks again

Trinity

artie ziff wrote:

thanks folks.
as it turns out i bought the apartment on the spot. the developer told me that i could possibly be moving in as early as august so time to get my skates on with regard to getting a solicitor/ getting final approval and so on

thanks again

COngratualtions Artie.

byte

With Donegal CoCo, if you refuse, you lose 20 points from your "score" unless you've reasonable grounds for refusing it.

Posy

I like the way there's no penalty with Fingal. It'd be unfair to penalise a large family for turning down a small apartment for example.

Trinity

Karyn wrote:

I like the way there's no penalty with Fingal. It'd be unfair to penalise a large family for turning down a small apartment for example.

I'd be really curious to see the statistics of how many singles have availed of the affordable housing and how many families.

They seem to be building more apartments than anything, not saying singles are not entitled to it but am curious!!

I was turned down myself a couple of years ago for myself and my son as they penalised me for creche fees and said i couldnt afford it, yet i had been renting for 900 a month on my own without any assistance. Boggles the mind!

jdivision

That's because there's more apartments than houses being built in many council areas. That is likely to change soon though, the weakness in housing will lead to the construction of proportionately more family homes. People are more likely to be willing to trade up to them given there's no stamp duty on new homes.

JupiterKid

What interests me about this thread is it seems to signal a growing trend of people who applied for affordable housing turning down the first place they are offered. This is a very clear sign to me of a house price crash that is only going to worsen, as everyone - potential buyers of open market and affordable housing - takes a "wait and see" approach that will further weaken house prices.

As far as I know, if the buyer of an affordable dwelling encounters negative equity when selling their house on, the local authority is obliged to make up the difference. This is the upside to the "anti-profiteering claw-back" provision under the schemes. Buyers of affordable housing are in the best position possible in these market conditions.

CelloPoint

JupiterKid wrote:

As far as I know, if the buyer of an affordable dwelling encounters negative equity when selling their house on, the local authority is obliged to make up the difference. This is the upside to the "anti-profiteering claw-back" provision under the schemes. Buyers of affordable housing are in the best position possible in these market conditions.

I doubt that very much. It would be naive for anybody to think that the CoCo are going to send a cheque in the post, for their percentage of the money lost, when the 'owner' decides they want to emigrate to Australia.

I am completely anti-affordable housing. I don't own a home in Ireland (nor do I want to in 2007). The whole scheme stinks of corruption and people who are well able to afford a good lifestyle should not be subsidised. Ownership is a privilge, not a right.

The_Conductor

JupiterKid wrote:

As far as I know, if the buyer of an affordable dwelling encounters negative equity when selling their house on, the local authority is obliged to make up the difference. This is the upside to the "anti-profiteering claw-back" provision under the schemes. Buyers of affordable housing are in the best position possible in these market conditions.

Do you have any reference to this?
I have a funny feeling this provision is not applied in a similar manner in the different councils (SDCC for example does not make any reference to it). If you could provide a link (or multiple links) detailing this provision and how it would apply, I'd be grateful. Kind regards, Shane

Jonnie_Onion

He's right.

If you look up the relevant law (forget what its called) on the statute books, it clearly indicates that if the property is sold for less than the original market price, that the local authority has to reduce the clawback so that the seller is not out of pocket. This covers all affordable housing schemes with this 20 year clawback.

CelloPoint

Jonnie_Onion wrote:

He's right.

If you look up the relevant law (forget what its called) on the statute books, it clearly indicates that if the property is sold for less than the original market price, that the local authority has to reduce the clawback so that the seller is not out of pocket. This covers all affordable housing schemes with this 20 year clawback.

I wonder will the CoCo send you a cheque when you run out of claw-back?

JupiterKid

I did some research on affordable housing some years ago and I distinctly remember reading from the original legislation in 1999, that in the case of negative equity upon resale, the local authority would make up the difference, if any, between the resale price and the originak selling price - effectively a reverse of the "calw back" in a capital appreciation situation. If you're unsure, check with the Housing Policy section of the DoE.

I don't think that this provision applied however to Shared Ownership scheme houses, and as so many houses under the affordable scheme were purchased through Shared Ownership, this is an unclear area that needs to be looked at.

Jonnie_Onion

CelloPoint wrote:

I wonder will the CoCo send you a cheque when you run out of claw-back?

They can only reduce the clawback to zero. Any more and you start to take the hit.

Jonnie_Onion

Here's a link:

http://www.irishstatutebook.ie/2002/en/act/pub/0009/sec0009.html#partii-sec9

See 3(d)

don't think that this provision applied however to Shared Ownership scheme houses, and as so many houses under the affordable scheme were purchased through Shared Ownership, this is an unclear area that needs to be looked at.

Shared ownership has the same clause in the 2002 Act.

The_Conductor

Jonnie_Onion wrote:

He's right.

If you look up the relevant law (forget what its called) on the statute books, it clearly indicates that if the property is sold for less than the original market price, that the local authority has to reduce the clawback so that the seller is not out of pocket. This covers all affordable housing schemes with this 20 year clawback.

That is a bit ridiculous, why should someone who gets assistance towards buying a property have this sort of safety net, when everyone else is facing the prospect of negative equity and has no recourse to these sort of schemes.

I imagine that its talking about absolute figures though- so at current rates when inflation is factored in, without any fall in price, there is a real fall of 5% (there or there abouts). Even so- it does seem a little odd that this sort of benefit is being offered to one group of people, particularly when the number of ordinary punters suffering from negative equity is lengthening by the day. Most people who have bought in the very recent past have gotten shoebox apartments that are essentially unsaleable at any price whatsoever.

If safety nets such as this are available to purchasers of affordable housing units, it is only fair that there should be some sort of a serious revision of the bankruptcy laws here. If you or I were to default on our mortgage- we cannot simply hand the keys back to the bank and walk away. We are tarred by an 1888 law which has never been properly revised (for personal bankruptcies- commercial bankruptcy law is a different matter).

The consequences of being declared bankrupt in Ireland include:

1. All of the bankrupt debtor's property at the date of the making of the bankruptcy order (called the " order of adjudication ") transfers to the Official Assignee with the exception of necessaries up to a value of €3100 or more if the court allows; all property which the bankrupt acquires after the date of the order of adjudication transfers to the Official Assignee if and when the Official Assignee claims it (for a 12 year period);

2. The bankrupt's salary or pension is liable to being appropriated by the court for the benefit of the creditors subject to any provision the court may make to meet the family responsibilities and personal situation of bankrupt;

3. If (s)he obtains credit of €650.00 or more without disclosing the bankruptcy, the bankrupt is guilty of an offence;

4. If (s)he is employed/trades in a name other than that in which s(he) was adjudged bankrupt without disclosing the latter name , the bankrupt is guilty of an offence;

5. If the bankrupt acts as a director, manager, auditor, liquidator or receiver of a company without leave of the court, s(he) is guilty of an offence ;

6. The bankrupt has certain legal obligations in connection with the administration of his/her estate, including the delivery up of his accounts or papers to the Official Assignee when requested; the delivery of his/her property to the Official Assignee, the filing of a statement of affair the giving of every reasonable assistance to the Official Assignee in the administration of his/her estate; and the disclosure to the Official Assignee of any property acquired by the bankrupt since the date of the bankruptcy order (for a 12 year period).

It does seem slightly extraordinary that purchasers of affordable housing are given a safety net of the magnitude that now seems to be possible- particularly in the current climate. Of course it was most probably never envisaged that 4-5000 people a month would enter a position of negative equity, but that is what is happening at the moment.

The_Conductor

Jonnie_Onion wrote:

They can only reduce the clawback to zero. Any more and you start to take the hit.

Hmmm- even still, it is remarkably generous. But then again, the number of people who have purchased apartments and other shoe boxes over the past few years, with no intention whatsoever of staying in them longterm, on the contrary intending to trade up to their little house with its garden and 2.5 kids- is quite startling.....

It doesn't really matter what happens. Be they purchasers of affordable houses, or ordinary punters paying top dollar for their abodes, there are going to be a lot of terribly dissappointed people out there.......

byte

Whatever happened to buying a home (for life) and not just a house "just to get a foot on the property ladder"?

I hate moving house with a passion, and when I move again, I intend it to be my last time moving, unless there is an extreme reason for me to do so!

Trinity

byte wrote:

Whatever happened to buying a home (for life) and not just a house "just to get a foot on the property ladder"?

I hate moving house with a passion, and when I move again, I intend it to be my last time moving, unless there is an extreme reason for me to do so!

I'm with you on that one. This will be my 3rd move in 3 and a half years and my son begged me for it to be the last time so when i do buy a house please god it will be for keeps unless there is something wrong with the house or the area etc but i should know that before i move in!!

Jonnie_Onion

byte wrote:

Whatever happened to buying a home (for life) and not just a house "just to get a foot on the property ladder"?

I hate moving house with a passion, and when I move again, I intend it to be my last time moving, unless there is an extreme reason for me to do so!

Unfortunately most people can't afford a suitable home for life when the pressure to buy first takes hold.

jdivision

There is no cost to the local authority if the affordable house price falls from its full market value unless it falls below the price at which it was sold to the affordable housing owner who is then liable for the difference. If the homeowner sells on at a price above which he or she paid for the property, the local authority makes a profit.
JupiterKid, turning down affordable housing usually has nothing to do with wait and see approach. It's to do with finding the right property. I bought my apartment while residential prices were still rising but I still had turned down two others before that one.

Jonnie_Onion

Of course there's a cost to the local authority. Normally if a house is sold in the first 10 years they get the full clawback - the difference between what they paid the develper and what the buyer paid the local authority.

In the case of negative equity this clawback is reduced, so they lose money.

jdivision

In almost all cases, the affordable homes buyer pays what the local authority paid for the house plus an administration charge. The clawback is to discourage profiteering, nothing else.

starky

smccarrick wrote:

Most people who have bought in the very recent past have gotten shoebox apartments that are essentially unsaleable at any price whatsoever.

Was some one holding a gun to there heads at the time? No, they made the choice thinking that they were also going cash in on the property madness that has gone on here, it was a risk, thus far it has not paid off, not to say it wont in time of course.
I disagree about not being able to sell at any price what so ever, they can of course sell and take the negative equity hit if they cant afford to keep up a mortgage or really want to get out of the property market, of course they will end up owning a small fortune, but put your hand in the property market fire and you may get your fingers burnt (sound familiar?? try London 1980’s), every one has been warned about this happening for years, but the “It wont happen here, it just cant, Ireland is totally different to that, blah blah blah” attitude has kept people disillusioned

smccarrick wrote:

That is a bit ridiculous, why should someone who gets assistance towards buying a property have this sort of safety net, when everyone else is facing the prospect of negative equity and has no recourse to these sort of schemes.

Now hang on a minute, you are missing the point, Affordable housing is not there so people can make a quick buck, its there for people who genuinely want to own there own home, and live there long term. Although I appreciate this may be an alien concept in this country, do you not buy a house to make 100k a year?? Affordable housing schemes are stringent and ridged in there structure and there is no possible way to make money from them in the short term. Go and have a go at the developers/solicitors/auctioneers/investors, and leave the pittance of Affordable home buyers out of it, its developers/solicitors/auctioneers/investors and their pure greed that has caused this property mess.

podge018

Seems to be lots of misconceptions here.

I bought a 2 bed apartment for 155k which had a market value of 310k at the time.

If I sell it tomorrow for 310k everyone is happy.

If I sell it tomorrow for 350k I make 20k, and the council makes 20k.

If I sell it for 280k (most likely!) nobody makes a loss.

If I sell it for 155k nobody makes a loss.

If I sell it for 140k I am then liable for the 15k difference.

I have yet to see any predictions by people claiming that property value will fall to 50% of the current level so I reckon we're fine.

iguana

podge018 wrote:

If I sell it for 280k (most likely!) nobody makes a loss.

If I sell it for 155k nobody makes a loss.

So someone who bought an affordable house has no incentive to get the highest price possible in a falling market. And if they really want to sell that apartment (say they've lost their job but have been offered another one abroad) what is to stop them just putting it on the market for €155k to get a quick sale and their money back even though there might be a few willing buyers at €200k? So the council is down €65k. That can't be right.

SkepticOne

CelloPoint wrote:

I am completely anti-affordable housing. I don't own a home in Ireland (nor do I want to in 2007). The whole scheme stinks of corruption and people who are well able to afford a good lifestyle should not be subsidised. Ownership is a privilge, not a right.

I agree with this. There's two aspects to the issue of affordable housing (scheme, initiative etc) that I think gets confused in discussions like this.

From an individual point of view it makes sense to go for a subsidised house if it is available. I can't understand why anyone would pay for a one-bed shoebox with no sound insulation when for the same price they can get a house at the expense of others.

But the fact that it benefits some people at the expense of others (e.g. those on lower wages) does not mean it is a good thing or the correct solution to generally over priced housing.

Those who criticise the scheme/initiative are normally coming from the second angle.

The_Conductor

SkepticOne wrote:

But the fact that it benefits some people at the expense of others (e.g. those on lower wages) does not mean it is a good thing or the correct solution to generally over priced housing.

Those who criticise the scheme/initiative are normally coming from the second angle.

Thats true. But when you benefit one group of people, there will always be a second group of people who do not benefit, or who end up helping to fund the benefit for the first group of people.

So- clerical staff may be able to get a nice 3 or 4 bed house with a nice garden, while their boss on 15k salary more than them, may be stuck in a 2 bed apartment with a higher mortgage than their staff in far better accommodation. Naturally the latter group of people will feel miffed.

The scheme really is legalised Robin Hood- only its not the rich who are being robbed to give to the poor- its those who are slightly better off being fleeced to give something to those who are marginally worse off than they.

podge018

So what do you propose? Get rid of affordable housing and just have social housing for single mothers with a heap of kids? Or do you suggest upping the bar to 60k incomes? There has to be a limit somewhere?

The_Conductor

podge018 wrote:

So what do you propose? Get rid of affordable housing and just have social housing for single mothers with a heap of kids? Or do you suggest upping the bar to 60k incomes? There has to be a limit somewhere?

Well- in one Fingal development, affordable housing was available for those on a combined salary of 70k- which is ludicrous in my opinion.

Yes, I do think that affordable housing should be abolished. I also think the following:
I think that stamp duty should be thoroughly reformed, to reflect the costs associated with registration of deeds etc- as was originally intended.
I think that mortgage interest relief should be abolished for all.
I think that investors should not be able to write off interest paid as an expense.
I think that there should be an annual property tax, incrementally higher, based on the value of the property- charged at a higher rate for second and subsequent properties, be they for investment purposes or otherwise.

I think that the government should quit meddling in the property market altogether. All they have succeeded in doing is stoking a soaring property market which is increasingly burning people as they encounter more and more difficulties in paying their mortgages back.

You cannot offer a carrot to someone (or a group of people) without accepting that someone has to grow the carrot for you. At the moment- its the taxpayer who are funding the carrot, and ultimately there is no-one other than the taxpayer who can/will pay for the carrot.

The current system has introduced massive inequities into the property market. People have to accept that simple fact. Removal of all the wonderful schemes we have will deflate property prices like nothing else. But- there really is no other solution. Property is not affordable- hence it will have to fall to meet a point where supply meets people's capacity to pay for, and demand for, property.

SkepticOne

podge018 wrote:

So what do you propose? Get rid of affordable housing and just have social housing for single mothers with a heap of kids? Or do you suggest upping the bar to 60k incomes? There has to be a limit somewhere?

No people on 60k incomes should not be subsidised although I believe some of the initiatives cater to people on these types of salaries.

The affordable housing initiative/schemes don't really solve any social need. They are a cynical political move designed to placate people's feeling left behind as house prices race ahead without addressing the reasons why there's been runaway house price inflation.

I think it should be fairly clear now why there's been house price inflation. People (not just speculators) bought houses, not because they were good value, but because prices were rising. But this buying forced prices higher and dragged in more people including speculators which in turn forced prices higher - a classic bubble scenario.

The normal response to asset bubbles (I don't think there are many now who would deny there's an asset bubble) is to raise interest rates - try to cool the market before it develops into a full scale mania. Of course, we gave up our right to set interest rates however fiscal measures were still available to us.

Unfortunately, instead of using fiscal measures to cool down the market, we did the opposite. We created tax incentives for people to buy houses and adjusted stamp duty bands in order to pump more money into the overheated market - exactly the opposite of what should have been done.

What they should have done back in 1999-2001 was

1. implement the Bacon recommendations and stick to them.
2. Also make renting a more attractive option like it is in Germany and other countries.
3. Encourage the creation of higher density but at the same time higher quality where people want housing, not half way across the country from where they work.

We did nothing about supply at the time it was needed back in the late 90's when people could not find even basic rooms to rent in Dublin and other cities. Now, of course, there is loads of building, but now we are heading into a crash and we'll have a vast oversupply of unsellable/unrentable shoe boxes.

What will happen is the crash. All bubbles crash and people will have a lot more to worry about than buying houses. People will boast about not having an enormous mortgage around their necks. The affordable housing schemes/initiatives will become an irrelevancy.

starky

smccarrick wrote:

I think that there should be an annual property tax, incrementally higher, based on the value of the property- charged at a higher rate for second and subsequent properties, be they for investment purposes or otherwise.

Well I am a supporter of affordable housing, that said I will be honest and hold my hands up and say that the reason is I would very much like to avail of it, I am one of those people that never got around to buying when I should have, my own fault!! So yes I have a vested interest in it, naturally obscuring my opinion on the subject, but I have no interest in trying to make any money out of it, if I get a place through AF, and I would prefer not to as I think it would tie me to Ireland, and that is not a good thing when I may have to uproot and work elsewhere if things get worse, It would be for the long term as a home to live in.
But I totally agree with what you said Above, this measure alone, if implemented would have helped to stop the situation getting to the critical levels they are at today. No one likes to have to pay more tax, but this measure is how things are done in other countries and I would totally support it. This would discourage people from dabbling in a market and messing it up. A capitalist solution to a capitalist problem!

jdivision

iguana wrote:

So someone who bought an affordable house has no incentive to get the highest price possible in a falling market. And if they really want to sell that apartment (say they've lost their job but have been offered another one abroad) what is to stop them just putting it on the market for €155k to get a quick sale and their money back even though there might be a few willing buyers at €200k? So the council is down €65k. That can't be right.

No it's not. Read Podge's post.

gurramok

podge018 wrote:

If I sell it for 280k (most likely!) nobody makes a loss.

If I sell it for 155k nobody makes a loss.

Someone here on boards did find something about protection from negative equity for AH buyers before though it was ambiguous

There is just a problem with it in that 2 councils which i contacted about it looked at me with 2 heads saying no such protection exists.
That would be 15k loss to both purchaser and council for 280k market sale.

Not a single council in the country has indicated that there is protection from negative equity publicly in that situation, it ain't a vote of confidence in protecting the buyer.

podge018

Fingal County Council indicated it to me.

ro2

podge018 wrote:

If I sell it for 155k nobody makes a loss.

That's only after 20 years. If you sell it now the council will want their 50% clawback ie 77.5k.

podge018

They don't. How hard is it to understand.

ro2

Very hard. It is the government we're talking about

Afuera

gurramok wrote:

Not a single council in the country has indicated that there is protection from negative equity publicly in that situation, it ain't a vote of confidence in protecting the buyer.

The Housing (Miscellaneous Provisions) Act 2004 has something in place to cover the situation where paying the clawback would put the seller into negative equity. I think basically it just specifies that the council will waive some or all of the clawback to prevent this happening. This legislation does still leave open the slim chance that the property could go below the value of the mortgage on it, in which case the seller would still encounter a loss.

podge018

this was posted by Afuera in another thread that covers the whole thing.

No, that's not what I'm saying. Sorry if I wasn't clear in the post.
I'll use some figures to show you how I think it works:

A buyer purchases a property worth 300k for 150k (i.e. clawback of 50% will be expected if they sell within 10 years). If they sell for 200k then technically they would owe the council 100k and they would receive 100k for themselves. The original purchase was 150k so in this case the council will only demand 50k clawback instead of the full 100k. This means that the buyer will receive 150k for themselves which will cover the original purchase price.

Using different figures, I'll show you how it's still possible for the buyer to lose though:

Same buyer purchases a property valued at 300k for 150k. They end up selling it for 100k due to changed circumstances. They should pay a 50% clawback to the council of 50k but since the selling price is below the original purchase price the whole clawback will be waived. If the 100k that they receive from the sale doesn't cover their outstanding mortgage, they will be in negative territory.

This part of the housing act basically covers your arse:

(d) Where the amount payable under paragraph (a) would reduce the proceeds of the sale (disregarding solicitor and estate agent's costs and fees) below the price actually paid, the amount payable shall be reduced to the extent necessary to avoid that result.

podge018

ha ha, speak of the devil

Afuera

podge018 wrote:

ha ha, speak of the devil

Just pipped you to it

gibo_ie

Does anyone else not see the unfairness to the owner of the site which the property is being built? For every 5 properties being built, the council take one (I will explain the take part in a minute).

Now people may say that the developers can afford it and maybe they can but is this fair? Example is that i built two houses three years ago which i rent out. On a site near it i intended to build three more as it is in a village in need of some housing. The council told me that one would be theirs as i did not qualify for exemption.

Take = They pay you the actual build cost, their value on the land used (NOT market value!!) and a small profit (in the region of 5-10k max i was informed by the housing dept.). Now this may still seem fair enough to some people but it certianly does not help me make a living in any way. (5-10k for a years work....??)

Anyway with clawback by council if the person sells the house...do you think the council will then give some of the clawback to the guy they took the house\land from in the first place??

Anyway i withdrew my plans and am going again for one less, so council get none of my hard earned money!!! Ba$tard$!!!!

Note: I am not a developer, was just lucky to have some land in a village. I even have a real job!!

Bring on the noise....

podge018

I thought that developer's had to sell 10% to the county council.

Looks like you should have only had to give half a house.

jdivision

gibo_ie wrote:

Now people may say that the developers can afford it and maybe they can but is this fair? Example is that i built two houses three years ago which i rent out. On a site near it i intended to build three more as it is in a village in need of some housing. The council told me that one would be theirs as i did not qualify for exemption.

Anyway i withdrew my plans and am going again for one less, so council get none of my hard earned money!!! Ba$tard$!!!!

How big is the site? Below a certain size there is no requirement to provide social and affordable housing. Where is the site?? In certain areas you don't have to provide any social and affordable units because there is already a certain amount of social housing in the area.

gibo_ie

jdivision wrote:

How big is the site? Below a certain size there is no requirement to provide social and affordable housing. Where is the site?? In certain areas you don't have to provide any social and affordable units because there is already a certain amount of social housing in the area.

It is above the .20 ha size limit, but this is only part of the conditions anyway. In all areas you must provide houses or cash, and the cash part is now being removed and this goes for all councils.
20% is the amount not 10%!