Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

'Affordable housing' now more expensive than open market

Options
  • 20-10-2008 12:47pm
    #1
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,281 Mod ✭✭✭✭


    http://www.irishtimes.com/newspaper/frontpage/2008/1020/1224454388516.html?via=mr

    FIONA GARTLAND

    WITH THE downturn in property prices, homes in north and south Dublin and Meath are on the market for the same or lower prices than similar homes under the affordable housing scheme.

    Buyers can save €10,000 on €245,000 two-bedroom apartments in Phibblestown Wood, Ongar, Dublin 15, and €5,000 on €205,000 three-bedroom homes at Parnell Drive and Parnell Green, Ladyswell, Mulhuddart, by purchasing on the open market instead of through Fingal County Council.

    Three-bedroom apartments at Bailis Village, Navan, Co Meath, available through the county council's affordable housing scheme for €233,000, are advertised at the same price on the open market, as are two-bedroom properties at Eaton Square, Rathcoole, in south Dublin, available through the county council for €220,000. By purchasing on the open market homeowners avoid the "clawback" aspect of affordable housing schemes. Clawback means that if a home is sold within 20 years of purchase, the local authority must be paid a percentage of the price.

    Affordable homes are built under Part V of the Planning and Development Act 2000. Under the Act, developers provide land, money or 20 per cent of their residential development to the local authority for social and affordable housing. The local authority must pay the developer a fair price. The price is based on land value, construction costs and a reasonable profit for the developer, usually between 7.5 per cent and 15 per cent. This is the price which is then passed on to the homeowner.

    Agreements on Part V between developers and local authorities may be reached two or three years in advance of the units being delivered.

    In the past, because of the rapid growth in property prices, this has worked to the advantage of local authorities. However, some authorities have found themselves tied into legally-binding agreements under which they will pay more than the going rate for property. A spokeswoman for Fingal council said there is still interest in buying affordable homes in Fingal. They had 732 approved applicants on their affordable housing list. Some 79 per cent of applicants are single and 55 per cent are under 30 years of age. "Prices for units in Parnell are still quite favourable even in a declining market. Prices for Phibblestown Wood, which were provided to Fingal County Council through the Affordable Homes Partnership, are somewhat higher, although we have a very small number of those units for sale," the spokeswoman said.

    A spokeswoman for South Dublin council said they were very conscious of the housing market, which was changing on a daily basis. The Department of the Environment said it would be open to the local authority to seek to renegotiate the price agreed with a developer where there had been significant market changes.


Comments

  • Options
    #2
    johnnyskeleton
    Moderators, Entertainment Moderators, Politics Moderators Posts: 14,493 Mod ✭✭✭✭johnnyskeleton


    Anecdotally, I've heard of other estates where the open market price is either the same or within 10% of the AH price.

    How onerous are the conditions though? Can you rent a room under AH?


  • Options
    #3
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,281 Mod ✭✭✭✭The_Conductor


    johnnyskeleton wrote: »
    Can you rent a room under AH?

    Strictly speaking- no, you can't. DCC, Fingal and a few other councils are actively telling people that they have no probs with people using the Rent-a-room scheme etc, so long as they only rent a single room in the house and it remains their Principle Private Residence.

    It'll be really interesting to see what happens with the AH scheme, now that an equity stake in the property, as opposed to a clawback, is the manner in which the scheme is supposed to work.......

    Hmmmm- its one way to dampen demand I suppose......


  • Options
    #4
    ParkRunner
    Registered Users Posts: 3,021 ✭✭✭ParkRunner


    I think they have gone WAY too far now with the affordable housing scheme now that you will effectively have to pay back the benefit you get from buying at an affordable price regardless of whether you sell the property or not. You could be faced with a 30% lump sum equity repayment at the end of your mortgage which could be absolutely enormous! An example in the Irish times was that you could be faced with a lump sum €90,000 repayment in 2044 and that is for an affordable house! Absolute insanity :eek:


  • Options
    #5
    gurramok
    Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    Yes, thats right. Thats the other scheme which is replacing the AH to 'help' buyers buy overpriced housing.
    Advice to newbies and the uninformed, do not buy into any govt assisted scheme, they are a scam to bleed you dry for the rest of your life to support the developers greed.


  • Options
    #6
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    lol at thread title, in a mirthful way. That is all.


  • Advertisement
  • Options
    #7
    gimmick
    Closed Accounts Posts: 21,296 ✭✭✭✭gimmick


    EF wrote: »
    I think they have gone WAY too far now with the affordable housing scheme now that you will effectively have to pay back the benefit you get from buying at an affordable price regardless of whether you sell the property or not. You could be faced with a 30% lump sum equity repayment at the end of your mortgage which could be absolutely enormous! An example in the Irish times was that you could be faced with a lump sum €90,000 repayment in 2044 and that is for an affordable house! Absolute insanity :eek:

    Is this being back dated, or is only for hosues bought fom Jan 1 2009?

    I bought a house in Jan 2007 and would hate to think I would have to repay equity in 28 years time.

    With regard to the thread title, while the prices have fallen massively and the "affordable" prices paid last year don't look so good versus private purchase at present, the full story is being somewhat under told. The fact is, to buy an AH 18 months ago for €200k was a damn sight easier than trying to buy something privately today for, say, €190k. Mortgages are not being given out willy nilly anymore. The banks are stopping just short of looking for blood tests ffs.

    Just for the record, houses in my estate which which were valued at €385k in Jan 2007 are now at an asking price of €280k. Absolutely incredible.


  • Options
    #8
    Mailman
    Closed Accounts Posts: 1,571 ✭✭✭Mailman


    those local authority mortgages are ridiculously inflexible.
    Accelerating payments doesn't benefit you anywhere near as much as on an open mortgage loan(forgetting clawback, just the actual mechanism).
    Affordable housing mortgage rates aren't especially competitive and the mortgage assurance component isn't cheap.

    Above comment varies from local authority to local authority.


  • Options
    #9
    gimmick
    Closed Accounts Posts: 21,296 ✭✭✭✭gimmick


    Our mortgage is not from the local authority, its an independant mortage at one of the local authorities chosen banks. It is still a private loan as such.


  • Options
    #10
    Mailman
    Closed Accounts Posts: 1,571 ✭✭✭Mailman


    then you may be in the affordable housing initiative rather than AH scheme.


  • Options
    #11
    gimmick
    Closed Accounts Posts: 21,296 ✭✭✭✭gimmick


    Excuse my ignorance, but I thought they were all the same? What is the difference?


  • Advertisement
  • Options
    #12
    lostexpectation
    Closed Accounts Posts: 9,082 ✭✭✭lostexpectation


    can the authorities and the builders not reach a more flexible deal to get the things shifted for everybodies sake?


  • Options
    #13
    Daith
    Registered Users Posts: 4,946 ✭✭✭Daith


    lostexpectation wrote: »
    can the authorities and the builders not reach a more flexible deal to get the things shifted for everybodies sake?

    Didn't the local authorities buy the apts back in 2006 or something? They're locked into them. Nothing to do with builders who have got their money. Probably why the scheme is changing so the authority can get back the full amount they paid for.


  • Options
    #14
    ParkRunner
    Registered Users Posts: 3,021 ✭✭✭ParkRunner


    gimmick wrote: »
    Is this being back dated, or is only for hosues bought fom Jan 1 2009?

    I bought a house in Jan 2007 and would hate to think I would have to repay equity in 28 years time.

    With regard to the thread title, while the prices have fallen massively and the "affordable" prices paid last year don't look so good versus private purchase at present, the full story is being somewhat under told. The fact is, to buy an AH 18 months ago for €200k was a damn sight easier than trying to buy something privately today for, say, €190k. Mortgages are not being given out willy nilly anymore. The banks are stopping just short of looking for blood tests ffs.

    Just for the record, houses in my estate which which were valued at €385k in Jan 2007 are now at an asking price of €280k. Absolutely incredible.

    It's from January next year as far as Im aware. Once your contract was signed back in 2007 im sure they cant backtrack on it now and hit you with a requirement to buy back an equity in the property.


Advertisement