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Government Funds Local Authority Housing Scheme

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Comments

  • #152
    KellyXX
    Registered Users Posts: 365 ✭✭KellyXX


    smurgen wrote: »
    I think people would be mad to buy in ireland now.i can't see myself buying for at least 5 years now.

    We told ourselves that about 5 years ago. Should have bought then. We could have but we decided to wait for the crash. Waiting for the crash now we.would just be the same, but paying more rent while waiting.


  • #153
    B00MSTICK
    Registered Users Posts: 1,917 ✭✭✭B00MSTICK


    LirW wrote:
    Are you living in Dublin, Kelly? Because if you're trying to buy in Dublin for a family, 320 isn't getting you much there in most areas. While it definitely would work out for other counties, it'll put a lot of pressure on the market in and around the biggest cities in Ireland.
    Perfect though for people living for example in Sligo.
    Also if you consider quitting and going through with it yet it would happen that the council application would take 18 months or more to complete or would disqualify you for whatever reason, what would you do then?

    Genuinely interested.

    This.

    It's limited to ~1000 applicants (550 in the greater Dublin area)
    The requirements regarding salary are quite broad - plenty of people earning <€50k and I'd say a significant number of couples (especially those with kids) with a combined income of <€75k. And that's excluding those who want to "manipulate" their earnings.

    This would suggest that you'd have to be incredibly lucky to get onto it. Which to me would mean that there'd certainly be some level of scrutiny applied.

    If you do pack your job in tomorrow and try to get a mortgage they'll ask for the standard info. P60s, previous 6 months payslips and bank account details. I'm sure the government scheme will ask for the same.
    We don't even know how long the process would take or how they would screen the applicants. (I'm not sure how they will cope with 1,000s/10,000s of applications coming in either!)

    Assuming you did make it to the "In review" stage, they'll easily spot the sudden lack of funds/difference in P60s and will probably ask about it. So you'd probably have to wait at least 6 months after going on leave/quitting your job before applying.

    To me the target candidates for this scheme is an individual/couple/family who have been working long term in low-paying jobs, have evidence of savings, little extravagant/frivolous spending and just don't have the income to meet the LTI requirements.

    People who have been earning over/close to the maximum amount up until recently but suddenly quit would be among the first to be declined IMO.

    If you are close to the limits (as a couple at least) and you have a strong record of savings and a decent deposit you'd probably have a very good shot at getting an exception on the 3.5 LTI rule anyway.

    To be clear, I think the whole scheme is a terrible idea anyway but attempting to artificially reduce your income to get on it is not going to work.


  • #154
    Darkglasses
    Moderators, Computer Games Moderators, Sports Moderators Posts: 14,526 Mod ✭✭✭✭Darkglasses


    lightspeed wrote: »
    one of the eligibility rules is as follows:

    "be in continuous employment for a minimum of two years, as a primary applicant or be in continuous employment for a minimum of one year, as a secondary applicant"

    Would this mean that a single person could not have been unemployed even for a few months in past 2 years?

    Yes, they would not be ineligible in that case.


  • #155
    scouserstation
    Registered Users Posts: 328 ✭✭scouserstation


    quadrifoglio verde wrote: »
    You know what I think is terrifying.
    The government have decided to offer mortgages at greater lti ratios than central bank rules, to people who can't borrow from a conventional bank and charge them lower interest for it.

    Maybe if the banks werent being so ridiculous with their mortgage applications the government would not have needed to step in. People keep saying the only way to fix the housing problem is to increase supply but you cant just wave a wand.

    The government cant just start building large scale housing developments (for a number of reasons) so we have to rely on property developers and the second hand property market to increase housing supply.

    As a result of central banking rules it is now harder for second time buyers, at the lower end of the market their are very few houses for sale at the moment. This combined with a lot of first time buyers finding it tough to get mortgage approval means that developers can be reluctant to build more housing no matter how many incentives the government throw at them, they need to be selling their units at the right price too.

    I think this is a good move by the government, it could give the banking system a well needed kick up the backside to lower interest rates and start giving mortgage approval where it is badly needed.


  • #156
    LirW
    Registered Users Posts: 4,825 ✭✭✭LirW


    I don't think the banks are being ridiculous, the banks are actually acting a lot more decent than they did a while ago.
    The only thing they could change is giving rent payments more credit than they currently do.

    Fact is not everyone is eligible for a mortgage at any time. What the government does is ridiculous in the regard of over-borrowing.

    Honestly banks at this time are the least ridiculous party involved there.
    And no, the banks should under no circumstances start giving money to builders like they did in the boom. I think we can all imagine where this is going to end.

    And it's also not entirely the banks fault that second time buyers are pretty f'd at the moment.


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  • #157
    bush
    Closed Accounts Posts: 2,878 ✭✭✭bush


    I wonder if being offered less than 3.5 your gross after a stress test be enough to get you on this scheme?


  • #158
    scouserstation
    Registered Users Posts: 328 ✭✭scouserstation


    In order for a healthy property market to function there needs to be finance available, for developers and for purchasers. The banks are not completely blameless in this housing "crisis" we now find ourselves in.


  • #159
    MayoSalmon
    Registered Users Posts: 2,240 ✭✭✭MayoSalmon


    scouserstation wrote:
    In order for a healthy property market to function there needs to be finance available, for developers and for purchasers. The banks are not completely blameless in this housing "crisis" we now find ourselves in.


    There is no shortage of credit hence the queues for new builds and multiple offers on houses.

    Scheme is completely unnecessary and a pure political stroke


  • #160
    scouserstation
    Registered Users Posts: 328 ✭✭scouserstation


    MayoSalmon wrote: »
    There is no shortage of credit hence the queues for new builds and multiple offers on houses.

    Queues for new builds are happening because their is not enough new housing being built, many developers are not building because it is not financially viable at the moment.

    Multiple offers on houses are happening because their are not enough second hand houses on the market, many second time buyers just cannot get a mortgage.


  • #161
    Cookie_Monster
    Registered Users Posts: 24,468 ✭✭✭✭Cookie_Monster


    scouserstation wrote: »
    Multiple offers on houses are happening because their are not enough second hand houses on the market, many second time buyers just cannot get a mortgage.

    :confused::confused::confused:
    If that were the case there wouldn't be multiple offers happening surely?
    Restricted supply and a proliferation of people on approved finance greatly increases the number of offers being made...


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  • #162
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    GingerLily wrote: »
    It's terrifying that people are even thinking of quitting their jobs to qualify.

    Terrifying isn't how I'd describe it- though I am appalled at the suggestion.......

    As I said earlier in this thread- it is quite stupefying that there are not products of this nature available to *all* borrowers on the Irish market. It is the norm in most EU countries- and the Germans and others are scratching their heads at how/why the Irish have such a love affair with variable rate products.

    I think the scheme should be open, without restriction, to whomsoever wishes to avail of it.


  • #163
    hots
    Registered Users Posts: 5,200 ✭✭✭hots


    scouserstation wrote: »
    at the lower end of the market their are very few houses for sale at the moment.

    And you think this will be improved by this scheme? The lower end of the market is going to have far less supply once 200m of government mortgages are pumped into it.


  • #164
    BattleCorp
    Registered Users Posts: 11,758 ✭✭✭✭BattleCorp


    hots wrote: »
    And you think this will be improved by this scheme? The lower end of the market is going to have far less supply once 200m of government mortgages are pumped into it.

    €200m equates to about 700 houses/apartments, (Avg. €285k per house/apartment).

    It's not a huge amount of houses. And to be honest, I'm glad it's not. I don't think this is a good idea at all. It will push the price of houses higher.


  • #165
    hots
    Registered Users Posts: 5,200 ✭✭✭hots


    BattleCorp wrote: »
    €200m equates to about 700 houses/apartments, (Avg. €285k per house/apartment).

    It's not a huge amount of houses. And to be honest, I'm glad it's not. I don't think this is a good idea at all. It will push the price of houses higher.

    It's enough to make a large difference to certain areas of the market imo. How many parts of Dublin have a supply of ~€300k houses, not many. Potentially now we could have a few hundred artificial buyers in to increase the competition for these driving prices up in these pockets.


  • #166
    BattleCorp
    Registered Users Posts: 11,758 ✭✭✭✭BattleCorp


    hots wrote: »
    It's enough to make a large difference to certain areas of the market imo. How many parts of Dublin have a supply of ~€300k houses, not many. Potentially now we could have a few hundred artificial buyers in to increase the competition for these driving prices up in these pockets.

    Agreed.


  • #167
    Bargain_Hound
    Registered Users Posts: 521 ✭✭✭Bargain_Hound


    If €200m equates to ~700 houses, that roughly equates to the same number of houses currently on the market in Dublin at the moment within schemes 320k top limit (Quick daft search < €325K = 565 houses).

    House prices wont be affected by this? Yeah, right..:rolleyes:


  • #168
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Bargain_Hound wrote: »
    If €200m equates to ~700 houses, that roughly equates to the same number of houses currently on the market in Dublin at the moment within schemes 320k top limit (Quick daft search < €325K = 565 houses).

    House prices wont be affected by this? Yeah, right..:rolleyes:

    Are they planning to issue all the mortgages in one go solely to purchase properties in Dublin?


  • #169
    hots
    Registered Users Posts: 5,200 ✭✭✭hots


    Graham wrote: »
    Are they planning to issue all the mortgages in one go solely to purchase properties in Dublin?

    Do they need to to influence a pool of property that small?


  • #170
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    hots wrote: »
    Do they need to to influence a pool of property that small?

    Well there's a fair difference between 700 and lets say 250 over twelve months which would be around 20 additional buyers to the Dublin market on a monthly basis.

    That's without considering how/who is granting these mortgage approvals and the glacial bureaucracy that is likely to accompany them.


  • #171
    BattleCorp
    Registered Users Posts: 11,758 ✭✭✭✭BattleCorp


    Bargain_Hound wrote: »
    If €200m equates to ~700 houses, that roughly equates to the same number of houses currently on the market in Dublin at the moment within schemes 320k top limit (Quick daft search < €325K = 565 houses).

    House prices wont be affected by this? Yeah, right..:rolleyes:

    I don't think anyone believes that house prices won't be affected by this. I certainly don't.


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  • #172
    hots
    Registered Users Posts: 5,200 ✭✭✭hots


    Graham wrote: »
    Well there's a fair difference between 700 and lets say 250 over twelve months which would be around 20 additional buyers to the Dublin market on a monthly basis.

    That's without considering how/who is granting these mortgage approvals and the glacial bureaucracy that is likely to accompany them.

    Taking 20 a month, and in the last 30 days only 174 new properties added to daft in this category, that's still a massive artificial impact. Both of us using completely finger in the air maths but it's fairly clear to see it's going to make a different.

    I would imagine a larger portion of the 700 would be Dublin based too.


  • #173
    Bargain_Hound
    Registered Users Posts: 521 ✭✭✭Bargain_Hound


    Graham wrote: »
    Are they planning to issue all the mortgages in one go solely to purchase properties in Dublin?

    Perhaps I exaggerated my sample by comparing Dublin only, but only to highlight that it is still has significant potential to influence the Dublin market.
    BattleCorp wrote: »
    I don't think anyone believes that house prices won't be affected by this. I certainly don't.

    It seems though that some don't think it will have any affect.


  • #174
    hmmm
    Registered Users Posts: 11,205 ✭✭✭✭hmmm


    Bargain_Hound wrote: »
    Perhaps I exaggerated my sample by comparing Dublin only, but only to highlight that it is still has significant potential to influence the Dublin market.

    It seems though that some don't think it will have any affect.
    I think you're right. If you don't have access to this scheme, you will be priced out of the lower end of the Dublin market. The number of mortgages on offer are not massive, but enough to flood that part of the market. It's going to be a particular help to investors trying to shift shoebox apartments bought during the boom.

    Is there a guarantee that people with political backing or with the "right" type of connections won't be first in line for this scheme? I imagine there will be a lot of applications, so who decides who gets a golden ticket and what criteria will be used?


  • #175
    BattleCorp
    Registered Users Posts: 11,758 ✭✭✭✭BattleCorp


    Bargain_Hound wrote: »
    Perhaps I exaggerated my sample by comparing Dublin only, but only to highlight that it is still has significant potential to influence the Dublin market.



    It seems though that some don't think it will have any affect.

    Another affect that it will have with me is that it will make me feel p1ssed off because I am struggling to pay market rate interest rates on my mortgage and now the Government (and not the market) will give mortgages to people who earn similar sums to me but at vastly better mortgage rates (2% - 2.25% per year for 25/30 years).


  • #176
    KellyXX
    Registered Users Posts: 365 ✭✭KellyXX


    BattleCorp wrote: »
    Another affect that it will have with me is that it will make me feel p1ssed off because I am struggling to pay market rate interest rates on my mortgage and now the Government (and not the market) will give mortgages to people who earn similar sums to me but at vastly better mortgage rates (2% - 2.25% per year for 25/30 years).

    par for the course when you are middle income.


  • #177
    Lolle06
    Registered Users Posts: 235 ✭✭Lolle06


    BattleCorp wrote: »
    Another affect that it will have with me is that it will make me feel p1ssed off because I am struggling to pay market rate interest rates on my mortgage and now the Government (and not the market) will give mortgages to people who earn similar sums to me but at vastly better mortgage rates (2% - 2.25% per year for 25/30 years).

    If it makes you feel any better: There are families out there who can’t get a mortgage from the bank and have to resort to a CU loan with almost 6% interest rates. They also have to come up with 20% of the purchase price, on top off anything over 150k.
    But times are desperate.


  • #178
    Carlos Orange
    Registered Users Posts: 2,499 ✭✭✭Carlos Orange


    BattleCorp wrote: »
    Another affect that it will have with me is that it will make me feel p1ssed off because I am struggling to pay market rate interest rates on my mortgage and now the Government (and not the market) will give mortgages to people who earn similar sums to me but at vastly better mortgage rates (2% - 2.25% per year for 25/30 years).

    Could be worse. You didn't mention the people who are younger than you so qualify as they earn less than you now but go on to earn more than you when they get to be the age you started your mortgage.


  • #179
    Crunchymomma
    Registered Users Posts: 1,178 ✭✭✭Crunchymomma


    Will they take into consideration childcare costs or just loans/maintenance?

    We will qualify for a regular mortgage but would get much more from this scheme as we have 2 children in full time childcare


  • #180
    BattleCorp
    Registered Users Posts: 11,758 ✭✭✭✭BattleCorp


    Crunchymomma wrote: »
    Will they take into consideration childcare costs or just loans/maintenance?

    We will qualify for a regular mortgage but would get much more from this scheme as we have 2 children in full time childcare


    All expenses should be taken into account when you are applying for a mortgage because these expenses reduce your ability to repay the mortgage - but to answer your question, I don't know.


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  • #181
    Bass Reeves
    Registered Users Posts: 18,127 ✭✭✭✭Bass Reeves


    Ì think there is a few misconceptions about this scheme. I think it will have little impact on houses prices. What is that my opinion, because very few will qualify for max loan. I think it will be of more benefit to borrowers outside Dublin rather than those in Dublin. In Dublin it will really only be of use to single people on goodish incomes 40-50K looking to borrow for an apartment. It will make sense for a young professional couple to put forward one income less than 50K to borrow the price of an apartment. Just to give an idea of repayments

    200K borrowed over 30 years repayments of 750/month approx
    300K borrowed over 30 years repayments of 1120/month approx
    150K borrowed over 30 years repayments of 560/month approx

    For any single person that can get there hands on a loan like this it would be like golddust to buy a single bed in Dublin or a 2 bed in other larger urban centers.

    Slava Ukrainii



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