affordable housing - can somewhon plase help.

stevoman

Hi,

Im a moving on buying an affordable house on my own. the asking price is €159,000 and the council syas that the market value on them is €220,000.The situation is as follows. I have a baby with my girlfriend who is not interested in buying for about another 2 years. I am interested in getting my foot on the ladder despite current economic slowdowns.

What i am wondering is even with the cheap price i am paying if i sell in two years for example and buy a house with my girlfreind, will i lose out by much with the clawbacks. Im just cant seem to understand them.

Please note i am not trying to pull a fast one and make a quick profit, its just current situations in my life means that i need a house of my own instead of living with my parents.

Advice would be much appreciated.

Mountjoy Mugger

http://www.dublincity.ie/Housing/Home/AffordableHousingScheme/Pages/ResellYourAffordableHome.aspx gives a table. You'll pay one 5th of the total sale price as a clawback, if bought with Dublin City Council.

eve

You would also have to pay stamp duty on the house you would purchase with your girlfriend regardless of whether she would be a first time buyer or not.

stevoman

ok all the hidden cost are coming out now. my council said there was a 2% clawback in the first ten years and 1% towards the 20 years. does this sound very little?

punchestown

stevoman wrote: »

ok all the hidden cost are coming out now. my council said there was a 2% clawback in the first ten years and 1% towards the 20 years. does this sound very little?

Stevo, to my mind the council valuations are 2006 prices. The affordable price they are giving you now is the price they will be to purchase privately in 9-12 months time (if not sooner) You will gain everything from holding off purchase (and lose nothing) Take the time to save a decent deposit and wait for the council to maybe come back with a property that applies a proper market discount or buy privately.

stevoman

punchestown wrote: »

Stevo, to my mind the council valuations are 2006 prices. The affordable price they are giving you now is the price they will be to purchase privately in 9-12 months time (if not sooner) You will gain everything from holding off purchase (and lose nothing) Take the time to save a decent deposit and wait for the council to maybe come back with a property that applies a proper market discount or buy privately.

Just on that note the reason that i am interested in house is that the area is well sought after. House prices of three beds in the area were hitting €258,000 last years although i am aware of the acute drop lately. It is situated 5 minute walk from train station and 45 mins from dublin. 36 houses were built in the estate and all are for affordable housing scheme. since last week when announced 18 of them have been taken so they are moving fast. in the area the next prices of affordable are €189,000 for three beds and €169,000 for 2 beds so the price is very good and thats why im making the move. Also i have got to move out of the nest, in fairness my parents are becoming weary of us all there and it seems like my best option instead of renting whcih we all agree is dead cash.

punchestown

stevoman wrote: »

Just on that note the reason that i am interested in house is that the area is well sought after. House prices of three beds in the area were hitting €258,000 last years although i am aware of the acute drop lately. It is situated 5 minute walk from train station and 45 mins from dublin. 36 houses were built in the estate and all are for affordable housing scheme. since last week when announced 18 of them have been taken so they are moving fast. in the area the next prices of affordable are €189,000 for three beds and €169,000 for 2 beds so the price is very good and thats why im making the move. Also i have got to move out of the nest, in fairness my parents are becoming weary of us all there and it seems like my best option instead of renting whcih we all agree is dead cash.

Balrothery?

stevoman

punchestown wrote: »

Balrothery?

no, but a popular town in the commuter belt

johnnyskeleton

stevoman wrote: »

Also i have got to move out of the nest, in fairness my parents are becoming weary of us all there and it seems like my best option instead of renting whcih we all agree is dead cash.

We don't all agree that renting is dead cash, quite the opposite for a lot of people.

1) When house prices are dropping, it almost never makes sense to buy instead of renting. That is because the mortgage interest + the reduction in house prices (guestimated at 10% a year) is significantly more than the rent to be paid on most types of property.

2) Professional fees (I don't know if these are all paid for by the council for AH or not), stamp duty, water and waste charges & management fees all have to be factored in as well. If you rent your landlord will have to repair/maintain the premises and you can pay much less (or no) insurance if you rent whereas if you buy you have to pay a fair amount each month for life insurance and home insurance.

3) If you are thinking short term then renting makes more sense becuase you can move easily if you don't like the area and/or when circumstances change. In Ireland, there are hundreds of people who have had properties on the market for the last 2 years refusing to sell below what they consider the property to be worth, if you buy now in a few years you could be one of them.

4) Do you really want/need to live in a 3 bed house? If you work it Dublin, it might make more sense to rent in Dublin than to own outside of Dublin. Also, bear in mind that while a lot of places are only 45 mins to Dublin, that is not 45 mins to the city centre at rush hour. It could take you 45 mins at rush hour to go from 1km outside the M50 to 1km inside the M50.

So rent is not only cheaper than the cost of a mortgage in many instances, but you also get the added benefits of less hassle, less hidden charges and greater mobility. Therefore, it is not dead money.