Bidding against the Council

relax carry on

Bid on a house at yesterday in Mayo and the estate agent advised us that the council have started to bid/buy properties in the last few weeks. They were apparently interested in the one we bid on. We bid the asking yesterday but just got a call this morning from the agent saying the council just bid 10,000 over the asking? Unsure what to do now as if we let this one go now we will probably come up against the council again with its higher budget.

Aka Ishur

relax carry on wrote: »

Bid on a house at yesterday in Mayo and the estate agent advised us that the council have started to bid/buy properties in the last few weeks. They were apparently interested in the one we bid on. We bid the asking yesterday but just got a call this morning from the agent saying the council just bid 10,000 over the asking? Unsure what to do now as if we let this one go now we will probably come up against the council again with its higher budget.

I'd advise stick to your offer. You can't go around betting on stuff that hasn't happened yet, especially if the council is going in 10kover the next offer, which on the one hand I find doubtful, on the other not surprising. What would you do anyways? Counterbid by 1or2 grand you have added 11-12k to your original bid. Thats if the council doesn't raise again.

SarahMollie

Is anyone else deeply uncomfortable with LA's going around bidding against people looking to buy homes for themselves?

I've no issue if they want to buy of blocks or entire estates, as then they're only up against large investors or real estate trusts etc, but getting involved in bidding for individual units seems a bit off to me.

Mrs OBumble

Not uncomfortable. But surprised, I thought they'd want blocks of places to keep the estate management cost per unit down.

Then again, it's Mayo. There can't be that much demand for housing there, so perhaps they buy for specific needs.

SarahMollie

To clarify, I actually mean uncomfortable in 2 separate ways.

1. As a buyer, and especially if I was depending on a mortgage, I wouldn't want to come up against the council.

2. As a taxpayer, I don't want councils using my tax money to outbid people and inflate property prices. Who is keeping an eye on their spending? How do we know they're always tryng to get good value?

Ericdravancrow

Maybe the auctioneer's acting the maggot, with ghost bids. Ring the council or approach a councillor and ask if they are actively bidding in the area.

Bob24

SarahMollie wrote: »

To clarify, I actually mean uncomfortable in 2 separate ways.

1. As a buyer, and especially if I was depending on a mortgage, I wouldn't want to come up against the council.

2. As a taxpayer, I don't want councils using my tax money to outbid people and inflate property prices. Who is keeping an eye on their spending? How do we know they're always tryng to get good value?

I very much agree, especially on your second point.

In a situation whereby the government has acknowledged there is a shortage of property and some people are struggling to buy, this type of action can't go well with prospective buyers seeing their tax money used to prevent them from purchasing or at least make it more expensive for them (ultimately this is the outcome of LAs bidding on properties).

I have no problem with public funds being used for social housing, but if there is any will to fix the crisis, LAs should not be allowed to go the quick and easy way of using their cash to outbid private buyers on whatever properties seems appropriate. This might fix things for them in the short term, but will definitely exacerbate the housing crisis in the long term. A long term strategy would be to force them to build more stock which is clearly in addition to the existing private market.

The_Conductor

Councils and local authorities are specifically interested in single units that come up in reasonable knick and in good enough locations- rather than buying multiple units together- as this means they can get social housing more scattered- rather than having a group of social housing tenants all together in one immediate area- which would end up stigmatising an estate or area (as has happened too many times in the past).

Yes, though- it is very off-putting, as a taxpayer- to see a LA bidding against a private purchaser who is trying to house themselves- and effectively driving prices in an area.

Its a grey area though- in this instance- the local authority is pushing an integration agenda- trying to ensure their tenants are part of local communities and not stigmatised- over what prospective local purchasers may want.

Its a bit of a balancing act.

SarahMollie

The_Conductor wrote: »

Councils and local authorities are specifically interested in single units that come up in reasonable knick and in good enough locations- rather than buying multiple units together- as this means they can get social housing more scattered- rather than having a group of social housing tenants all together in one immediate area- which would end up stigmatising an estate or area (as has happened too many times in the past).

Yes, though- it is very off-putting, as a taxpayer- to see a LA bidding against a private purchaser who is trying to house themselves- and effectively driving prices in an area.

Its a grey area though- in this instance- the local authority is pushing an integration agenda- trying to ensure their tenants are part of local communities and not stigmatised- over what prospective local purchasers may want.

Its a bit of a balancing act.

Yeah, I get all this too, and thats why I used the word uncomfortable rather than saying its flat out wrong. Obviously all of the points you made are very valid.

Is there any oversight to ensure they're spending as wisely as possible? Obviously in some cases they're going to have to bid, but how do we ensure that those bids are justified and not just paying way over the odds.

*am aware that there may not be an answer to my questions!

relax carry on

Update, had to beat the council out it. Went over the asking, however prices in this area are increasing faster and faster each month. Very limited supply in the area.

McGrath5

In all fairness, if I found out I was bidding against a LA for a property, I would promptly withdraw from the process.

Mrs OBumble

SarahMollie wrote: »

Is there any oversight to ensure they're spending as wisely as possible? Obviously in some cases they're going to have to bid, but how do we ensure that those bids are justified and not just paying way over the odds.

The Local Government Audit Service is responsible for this: http://www.housing.gov.ie/sites/default/files/publications/files/overview_of_the_work_of_the_local_government_auditors_2016.pdf

Turtle_

McGrath5 wrote: »

In all fairness, if I found out I was bidding against a LA for a property, I would promptly withdraw from the process.

Easy to talk the talk, but there's a limited supply of houses out there. Seems unethical that the council are actively preventing people who can afford it from housing themselves, in favour of those who can't/won't.