Shared Equity Scheme

gandalfio

Apologies if there is already a thread on this, couldn't find one.

I had read this was supposed to be announced last Tuesday 22nd December. Still no details on it.

Does anyone have any update on it?

Fran_AZNEU

HI, Are you interested in equity investment in property?

thomas 123

gandalfio wrote: »

Apologies if there is already a thread on this, couldn't find one.

I had read this was supposed to be announced last Tuesday 22nd December. Still no details on it.

Does anyone have any update on it?

Seems like radio silence on this scheme the last few months!

Smee_Again

It was rightly pointed out that it's a bad idea so hopefully it'll just quietly disappear.

thomas 123

Smee_Again wrote: »

It was rightly pointed out that it's a bad idea so hopefully it'll just quietly disappear.

It’s a bad idea for direct purchases 100% , however for myself self building it could be very useful.

On an unbiased note - if it only applied to people self building it would be a great idea, no developers, housing supply would increase as a result! Probably would be seen as unfair but it would actually help supply imo.

Smee_Again

thomas 123 wrote: »

It’s a bad idea for direct purchases 100% , however for myself self building it could be very useful.

On an unbiased note - if it only applied to people self building it would be a great idea, no developers, housing supply would increase as a result! Probably would be seen as unfair but it would actually help supply imo.

Disagree completely.

gandalfio

Smee_Again wrote: »

It was rightly pointed out that it's a bad idea so hopefully it'll just quietly disappear.

Unfortunately, it's the only way I can afford to buy a home with current prices.

Smee_Again

gandalfio wrote: »

Unfortunately, it's the only way I can afford to buy a home with current prices.

75% of a home.

gandalfio

Smee_Again wrote: »

75% of a home.

It's better than 100% rent

thomas 123

Smee_Again wrote: »

Disagree completely.

Ah yeah! It’s easy disagree. However I still think my example holds true especially if you can carry out much of the works yourself.

As I said it’s not a good idea for the build to sell market. It will no doubt drive sale prices up.

The surface has not even been touched on the supply vs demand element of our housing crisis in the last 10 years.

thomas 123

Smee_Again wrote: »

75% of a home.

Borrow from the government or a bank though? You own nothing until the mortgage is paid off, in this case it doesn’t matter to whom as far as I can see - am I missing something?

thegreatescape

https://www.irishtimes.com/news/politics/housing-minister-wants-to-double-affordable-and-social-homes-in-new-developments-1.4538751 the Minister mentions the scheme in this article posted this evening

thomas 123

https://www.gov.ie/en/press-release/a8178-minister-obrien-welcomes-cabinet-approval-for-the-publication-of-affordable-housing-bill-2021/

Movement.

Self build not mentioned on this, private developments are, not sure if it’s only private developers or if it will include self builders but this is great news for anyone looking to buy - especially if the caps are approved.

Browney7

thomas 123 wrote: »

https://www.gov.ie/en/press-release/a8178-minister-obrien-welcomes-cabinet-approval-for-the-publication-of-affordable-housing-bill-2021/

Movement.

Self build not mentioned on this, private developments are, not sure if it’s only private developers or if it will include self builders but this is great news for anyone looking to buy - especially if the caps are approved.

Great news for development landowners and developers. Looking into the statistics for a minute from the CSO, 7,540 new build properties were sold in 2020, of which 3,884 were purchased by FTBs. If the government gives 75 grand in shared equity out to 1000 eligible shared equity recipients (maxing out the 75M budget), it would give over 25% of the existing market of 4000 FTB units extra cash to fuel price increases or else introduce 1000 new buyers to the market with supply being desperately constrained by lockdowns and REITs buying in bulk.

The developer and landowner lobby group is strong, you nearly have to hand it to them. The HTB change from 5% to 10% in the summer has all but been forgotten about as the sprinkles on top.

Finty Lemon

Browney7 wrote: »

Great news for development landowners and developers. Looking into the statistics for a minute from the CSO, 7,540 new build properties were sold in 2020, of which 3,884 were purchased by FTBs. If the government gives 75 grand in shared equity out to 1000 eligible shared equity recipients (maxing out the 75M budget), it would give over 25% of the existing market of 4000 FTB units extra cash to fuel price increases or else introduce 1000 new buyers to the market with supply being desperately constrained by lockdowns and REITs buying in bulk.

The developer and landowner lobby group is strong, you nearly have to hand it to them. The HTB change from 5% to 10% in the summer has all but been forgotten about as the sprinkles on top.

If you don't like developers, buy a site and build your own. Simple.

Browney7

Finty Lemon wrote: »

If you don't like developers, buy a site and build your own. Simple.

Yeah simple solution....if you can get planning. That's another story in Ireland

thomas 123

Finty Lemon wrote: »

If you don't like developers, buy a site and build your own. Simple.

Remains to be seen if self builds will be included! That’s my interest but as always detail is sparse.

Michael_Res1

Im a first time buyer with 45k saved plus htb approval for an additional 30k and mortgage approval for 210k. I'm looking to buy a new house for 320k. Surely, this shared equity scheme is a winner, or is there a catch? Will I have to forgo the htb, anyone know? I'd expect the price to move to 350k quickly. Considering the caps, I can't see the benefit of this scheme for those on the commuter belts, except for a single like me, unfortunately.

gandalfio

Michael_Res1 wrote: »

Im a first time buyer with 45k saved plus htb approval for an additional 30k and mortgage approval for 210k. I'm looking to buy a new house for 320k. Surely, this shared equity scheme is a winner, or is there a catch? Will I have to forgo the htb, anyone know? I'd expect the price to move to 350k quickly. Considering the caps, I can't see the benefit of this scheme for those on the commuter belts, except for a single like me, unfortunately.

Won't sellers now just push the asking prices up towards the cap limits?

touts

gandalfio wrote: »

Won't sellers now just push the asking prices up towards the cap limits?

Absolutely. It will be interesting to watch the websites over the next week or two. Prices will start to tick upwards.

Michael_Res1

gandalfio wrote: »

Won't sellers now just push the asking prices up towards the cap limits?

Yes, thats exactly what will happen. I suppose at least I've a chance of a new build house provided the sale price stays within the caps. Most 3 to 4 bedrooms are over 350k already

thomas 123

Michael_Res1 wrote: »

Yes, thats exactly what will happen. I suppose at least I've a chance of a new build house provided the sale price stays within the caps. Most 3 to 4 bedrooms are over 350k already

Tbf it would be madness if it’s based on perceived sales value and not cost.

Shelga

When will the details on salary thresholds for this be published? I’ve no doubt I don’t qualify for anything, as usual, as a single FTB on a decent enough salary, but just want to check :-/

So exhausted and so sick of these “schemes” that are an insult to our intelligence. What would it take to have a snap election called?

Surely they could ban REITS buying up entire estates, but they just don’t want to, it’s as simple as that. This government does not care about average citizens.

Michael_Res1

Michael_Res1 wrote: »

Surely, this shared equity scheme is a winner, or is there a catch?

You're being rode.

The government will give you, and everyone else, some free money to get you in the door of your house. But now that everyone has this free money, the price of property will increase by the same amount of free money that's being given to you.

For example, If two people want to buy a hat and both of them had 1k, then the hat will sell for 1k. If both people all of a sudden are given an extra 1k, then the hat is now worth 2k.

Except it isn't free money. In a few years, Mr. Government is going to send you a letter saying "remember that money we loaned you". You'll have a choice of paying it back (juggling it with your mortgage, which, if you needed the help of the scheme in the first place, means you're likely to be up to your eyes in debt because you bought above what you could afford) OR you can kick the can down the road, and as your property increases in value, so too, does the amount you owe the government.

I'll predict that most people will likely never pay the government back, because they can't afford it alongside their mortgage.

I haven't seen all the details, but I'm confident there's a clause in there that will prevent the amount owed to them (the equity in your house) from being worth less than it was when the money was loaned. At least if that was the case, should a recession hit and your property is worthless, you could (in theory) buy them out of their share then for a pittance.

However, I reckon what will really happen, is most people will saddle their kids with some debt when they die and the government want their share of the house (so either pony up the cash, or sell the house). EDIT: Actually, if i recall, interest is charged on top of the equity. So when you're being lowered into the ground, by that point the amount you owe the government will likely mean they own your entire house, as the interest has increased their share of the house.

The government are hell-bent on increasing the price of property. The only thing I can pray for, is that this might only directly affect new builds. So maybe those of us that don't mind going to 1980s ex-council houses that are in need of renovating might actually dodge a bullet (doubtful though, as the cost of new builds rising will push up the used stock prices too, of course).


It's a really bad scheme in my opinion. Ten years ago the banks were lending like it was no ones business. Now it's the government themselves that are saddling people with debts they can't afford. :rolleyes:

thomas 123

[Deleted User] wrote: »

So they have completly taken any good out of it by not extending it to self builds . Ffs.

EddieN75

[Deleted User] wrote: »

It's a "scheme" alright.

Is it not just bypassing mortgage limit by income caps?

Don't have enough to buy that house? Government will give you a loan. Two mortgages to repay
House prices rise further as government literally funding the increase!

Smee_Again

Price cap for Louth is €275K, a few new 3 bed semi-d in my estate is currently advertised at €280K. I'll be interested to see if it has any impact on the price, hard to see how it will, houses have been shifting pretty regularly even over the last 12 months.

gandalfio

Struggling to find finer details on this.
When does the shared equity scheme open?
Does it apply to any home on the market?
If I see a home tomorrow that I want to use this scheme to help me buy, how do I go about it?
Are there household income limits?

Smee_Again

gandalfio wrote: »

Struggling to find finer details on this.
When does the shared equity scheme open?
Does it apply to any home on the market?
If I see a home tomorrow that I want to use this scheme to help me buy, how do I go about it?
Are there household income limits?

Its not law yet, only approved by Cabinet so it'll still have to go through a Dail vote etc.

But, AFAIK, its new builds only and there are no income limits because there are price caps instead.

Finty Lemon

thomas 123 wrote: »

So they have completly taken any good out of it by not extending it to self builds . Ffs.

30k from help to buy available for self builds.
Fill out a few forms and it lands in your account. Cash.

That not enough for ya?

thomas 123

Finty Lemon wrote: »

30k from help to buy available for self builds.
Fill out a few forms and it lands in your account. Cash.

That not enough for ya?

No it’s not, considering I will have less spending power then those buying from a developer.

Let’s not forget the higher interest I will pay to a bank vs the government.

Finty Lemon

thomas 123 wrote: »

No it’s not, considering I will have less spending power then those buying from a developer.

Let’s not forget the higher interest I will pay to a bank vs the government.

Apologies now.
Are you pursuing a self build? Is it build cost that is your issue so? Is your problem then that you will have to pay a normally structured mortage in full after getting 30k from the state to help with your deposit to secure it?
I don't understand the comparison you are making.

Zenify

Smee_Again wrote: »

Its not law yet, only approved by Cabinet so it'll still have to go through a Dail vote etc.

But, AFAIK, its new builds only and there are no income limits because there are price caps instead.

I am going to contact my local TD and tell them I will not vote for them if they vote for this. I think we should all do it. Unless anyone has any better ideas?

EddieN75

Zenify wrote: »

I am going to contact my local TD and tell them I will not vote for them if they vote for this. I think we should all do it. Unless anyone has any better ideas?

It's a bit of an illusion to think that people emailing TDs will change anything.

The bill will pass, house prices will rise even further.

Il never own a home

Spideoige

Will the equity in the house decrease if say the house value decreases in let's say 10 years when you go to sell the house? Any new builds anywhere near me I would consider are currently at inflated prices and sure they are shiny and new right now but I would worry about the future attractiveness of some of these schemes.

thomas 123

Finty Lemon wrote: »

Apologies now.
Are you pursuing a self build? Is it build cost that is your issue so? Is your problem then that you will have to pay a normally structured mortage in full after getting 30k from the state to help with your deposit to secure it?
I don't understand the comparison you are making.

So I am less valuable as a house builder than a developer who will make a profit yeah?

I am housing myslef, thus taking pressure of the market - look at the charts above - my borrowing power as a self builder is less than someone buying a house from a private developer - especially If materials and labor rises as a result of this.

A normally structured mortgage will likely be more expensive then if I could avail of this scheme.

gandalfio

Smee_Again wrote: »

Its not law yet, only approved by Cabinet so it'll still have to go through a Dail vote etc.

But, AFAIK, its new builds only and there are no income limits because there are price caps instead.

Is there a limit on the equity the govt will fund? I had heard it would be 30%. But now hearing it's 20.

Smee_Again

gandalfio wrote: »

Is there a limit on the equity the govt will fund? I had heard it would be 30%. But now hearing it's 20.

The mortgage needs to be at least 70% of the purchase price, the remaining 30% can be split between the H2B (10%) and Shared Equity (20%).

shawki

thomas 123 wrote: »

So I am less valuable as a house builder than a developer who will make a profit yeah?

I am housing myslef, thus taking pressure of the market - look at the charts above - my borrowing power as a self builder is less than someone buying a house from a private developer - especially If materials and labor rises as a result of this.

A normally structured mortgage will likely be more expensive then if I could avail of this scheme.

Could be worse, you could be a first time buyer who wants to buy a 2nd hand home with zero supports.

Ah good, just in case the massive recent jumps in prices wasn't enough now I'll have to borrow another few dozen thousand. :rolleyes:

gandalfio

Smee_Again wrote: »

The mortgage needs to be at least 70% of the purchase price, the remaining 30% can be split between the H2B (10%) and Shared Equity (20%).

It really does push the boundaries of 'affordable'. Many people haven't paid anywhere near 40k in tax to claim the HTB.

EddieN75

gandalfio wrote: »

It really does push the boundaries of 'affordable'. Many people haven't paid anywhere near 40k in tax to claim the HTB.

Makes a mockery of the central bank lending rules too. Completely bypassing them.

cruizer101

EddieN75 wrote: »

Is it not just bypassing mortgage limit by income caps?

Don't have enough to buy that house? Government will give you a loan. Two mortgages to repay
House prices rise further as government literally funding the increase!

This. Can the central bank not step in to say hang on lads there is a limit there for a reason.

Also how happy are the banks about it, repossession is hard enough as is in this country, now lets add the complications of someone else having an interest in the house also.

Terrible scheme, it is not going to make anything more affordable, just push prices up.
And then those just outside of the income limits will be screwed over as houses that were in reach will now be out of it.

Smee_Again

EddieN75 wrote: »

Makes a mockery of the central bank lending rules too. Completely bypassing them.

cruizer101 wrote: »

This. Can the central bank not step in to say hang on lads there is a limit there for a reason.

Also how happy are the banks about it, repossession is hard enough as is in this country, now lets add the complications of someone else having an interest in the house also.

Terrible scheme, it is not going to make anything more affordable, just push prices up.
And then those just outside of the income limits will be screwed over as houses that were in reach will now be out of it.

The CB has to sign off on it and I don’t think they have yet so it’ll be interesting to see if the regulator actually does any regulating.

Regulators, mount up.

gandalfio

The difference is though that the equity loan doesn't have to be paid off until the home is eventually sold. So you're not saddled with additional monthly debt repayments on top of the monthly mortgage.

Smee_Again

gandalfio wrote: »

The difference is though that the equity loan doesn't have to be paid off until the home is eventually sold. So you're not saddled with additional monthly debt repayments on top of the monthly mortgage.

After 5 years interest starts accruing on the equity part.

Finty Lemon

thomas 123 wrote: »

So I am less valuable as a house builder than a developer who will make a profit yeah?

I am housing myself, thus taking pressure of the market - look at the charts above - my borrowing power as a self builder is less than someone buying a house from a private developer - especially If materials and labor rises as a result of this.

A normally structured mortgage will likely be more expensive then if I could avail of this scheme.

That is the story. You are housing yourself and paying plenty of tax to house others too no doubt. You obviously will get the HTB but that's it for a self build project; it's a good start to be fair.
I am in the same position as regards building for myself, but the way I look at it is its my choice to build and therefore my responsibility to pay for it.

As regards the profit made by a developer, that is private enterprise. You me or anyone can get involved in that business if we so wish to take the risks and rewards that accrue. You cant expect to make a profit while building a house for yourself. Build another one and sell that.

eoinbn

Smee_Again wrote: »

Its not law yet, only approved by Cabinet so it'll still have to go through a Dail vote etc.

But, AFAIK, its new builds only and there are no income limits because there are price caps instead.

There seems to be a lower income limit - just like the tax rebate scheme. The mortgage has to be 70%+ of the value which punishes savers.
For example - someone on 100k with a deposit of 50k can get a mortgage for 350k and 100k from the scheme for a 500k apartment. However someone on 60k cannot save 200k and get a mortgage for 210k and use the scheme for the remainder as the mortgage is below the 70%. They will also be ineligible for the 30k tax refund while the higher earner can avail or both.
Two schemes that will drive up the price of housing but also exclude some buyers. Pure genius.

shawki

shawki wrote: »

Could be worse, you could be a first time buyer who wants to buy a 2nd hand home with zero supports.

To be fair, there is a small, slithering possibility that might be a good thing, as hopefully it'll turn more people to new builds and the 2nd hand market might not have prices soaring as much.

Although, that said, I live in Drogheda, and loads of 2nd hand houses are being bought by smaller investors, with them being tidied up and leased back to the council for 25 years. Same exact thing that's happening with new builds, but on a smaller scale. Still pushes individual buyers out though.

Smee_Again wrote: »

Price cap for Louth is €275K, a few new 3 bed semi-d in my estate is currently advertised at €280K. I'll be interested to see if it has any impact on the price, hard to see how it will, houses have been shifting pretty regularly even over the last 12 months.

Where are you seeing a new Semi-D for 280 out of curiousity?

Smee_Again

Deleted User wrote: »

Where are you seeing a new Semi-D for 280 out of curiousity?

The good part of Louth In or around Blackrock, Fairways, Dundoogan and Earlsfort all have 3 beds at or below €280.