Government Funds Local Authority Housing Scheme

KellyXX · 24-01-2018 2:18pm

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.

B00MSTICK · 24-01-2018 3:37pm

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.

Darkglasses · 24-01-2018 6:59pm

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.

scouserstation · 24-01-2018 8:05pm

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.

LirW · 24-01-2018 8:59pm

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.

bush · 24-01-2018 9:46pm

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

scouserstation · 24-01-2018 10:30pm

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.

MayoSalmon · 24-01-2018 10:33pm

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

scouserstation · 24-01-2018 10:38pm

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.

Cookie_Monster · 24-01-2018 11:09pm

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.

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...

The_Conductor · 25-01-2018 8:33am

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.

hots · 25-01-2018 10:03am

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.

BattleCorp · 25-01-2018 10:39am

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.

hots · 25-01-2018 10:42am

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.

BattleCorp · 25-01-2018 10:50am

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.

Bargain_Hound · 25-01-2018 10:54am

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:

Graham · 25-01-2018 10:59am

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?

hots · 25-01-2018 11:01am

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?

Graham · 25-01-2018 11:18am

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.

BattleCorp · 25-01-2018 11:43am

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.

hots · 25-01-2018 11:56am

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.

Bargain_Hound · 25-01-2018 1:30pm

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.

hmmm · 25-01-2018 1:48pm

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?

BattleCorp · 25-01-2018 1:52pm

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).

KellyXX · 25-01-2018 1:54pm

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.

Lolle06 · 25-01-2018 1:59pm

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.

Carlos Orange · 25-01-2018 3:54pm

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.

Crunchymomma · 25-01-2018 5:14pm

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

BattleCorp · 25-01-2018 5:26pm

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.

Bass Reeves · 26-01-2018 12:07am

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.

ted1 · 26-01-2018 12:56am

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

You realise banks take about 500 off your monthly repayment capacity per child.

Crunchymomma · 26-01-2018 11:03am

ted1 wrote: »

You realise banks take about 500 off your monthly repayment capacity per child.

I do. We have already been working with a broker. I think it was 250 per child And then childcare dealt with separately with any loans/ maintenance (we have neither). We have good credit ratings and solid jobs so we will get a bank mortgage but obviously that amount is lower than I would like due to having 2 kids already. We could make it work absolutely but will be nice to throw in an application for this once my probation is up and see if we can get a slightly higher amount

quadrifoglio verde · 26-01-2018 12:46pm

From reading the application form, you need to provide details of the property to be mortgaged.
However no estate agent will accept an offer and go sale agreed without sufficient finance offer in place already.

Cuddlesworth · 26-01-2018 1:23pm

quadrifoglio verde wrote: »

From reading the application form, you need to provide details of the property to be mortgaged.
However no estate agent will accept an offer and go sale agreed without sufficient finance offer in place already.

Does the wording say you need a property to apply, or you need a property for a loan?

The_Conductor · 26-01-2018 1:26pm

quadrifoglio verde wrote: »

From reading the application form, you need to provide details of the property to be mortgaged.
However no estate agent will accept an offer and go sale agreed without sufficient finance offer in place already.

Yes- it is a bit of a cart before the horse situation........
Why would any seller entertain a prospective buyer who is as likely to fall out of the process as to complete it.......
I.e. a cashbuyer might have a 10% discount, a regular buyer with private mortgage approval a 5% discount- and someone who wants to take part in this scheme will pay top dollar...........

Its half baked in its current format- the underlying presumption is that the LA mortage approved purchasers are buyers of last resort and sellers are happy to jump through their hoops- when the facts on the ground- particularly the lack of supply- mean a seller has many other categories of prospective buyers who are far easier to deal with?

quadrifoglio verde · 26-01-2018 1:57pm

Cuddlesworth wrote: »

Does the wording say you need a property to apply, or you need a property for a loan?

Yep it requires details if the property to be mortgaged, if a new build it's stage if construction, and contact details for the valuer and solicitor

Darkglasses · 27-01-2018 1:07am

In practice you can leave that section of the application form blank, the underwriters at the Housing Agency do not require that information.

Idbatterim · 27-01-2018 5:11pm

MayoSalmon wrote: »

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

makes it look like they are doing something, drives up prices, could be argued, helps some buyers...

The_Conductor · 27-01-2018 9:24pm

Idbatterim wrote: »

makes it look like they are doing something, drives up prices, could be argued, helps some buyers...

Just because you're doing something- doesn't mean its something worthwhile- or indeed, beneficial for the sector. Sending more credit into an overheated market- that is starved of supply- has only one possible outcome- hikes in prices. This suits the builders and developers down to the ground- but ultimately is of no use whatsoever to anyone else- and indeed- it probably pushes new purchasers into property tax brackets they'd not otherwise be in- aka it has a long term cost associated with it- wholly aside from the inflated purchase price.

We need sustainable supply in the market- not stroke politics.

Unfortunately the electorate are fickle- and will most probably reward these shenanigans.

bush · 05-02-2018 11:37am

Has anyone here applied for this yet? Im planning to but im wondering if you can go in and talk to someone like you do in a bank or can you only apply by sending in the form?
The application form has some parts I would not be able to fill out yet. They want details of the house you plan on buying and solicitors name etc. I cant really go looking at houses seriously until I know how much I can get.

Junadl · 05-02-2018 11:40am

bush wrote: »

Has anyone here applied for this yet? Im planning to but im wondering if you can go in and talk to someone like you do in a bank or can you only apply by sending in the form?
The application form has some parts I would not be able to fill out yet. They want details of the house you plan on buying and solicitors name etc. I cant really go looking at houses seriously until I know how much I can get.

You write "To be decided" on that part. I was told by lady in the department.

bush · 05-02-2018 11:41am

Junadl wrote: »

You write "To be decided" on that part. I was told by lady in the department.

Thanks.
Another quick question if anyone knows.
If they think you cant afford the loan you ask for will they come back with a number they think you can afford or will they just deny the application?

robbo25 · 07-02-2018 10:37pm

Has anyone here applied for this yet? As I'm from UK, SDCC are looking for letter saying I didn't own property over there, anyone know where to get this? Also it says original bank statements, would copies from online banking suffice?

The_Conductor · 08-02-2018 8:08am

robbo25 wrote: »

Has anyone here applied for this yet? As I'm from UK, SDCC are looking for letter saying I didn't own property over there, anyone know where to get this? Also it says original bank statements, would copies from online banking suffice?

Hi Robbo-

You provide details of the areas in which you paid council tax for the period in which you were resident in the UK- and a statement from the relevant councils that council tax was paid in those areas.

You order official bank statements in the bank- on headed paper- and they send them out to you. They are specifically not supposed to accept online statements etc- that are open to being manipulated by people.

They have done a crack-down on documents- as there have been a few high profile examples of people doctoring documents.

autumnbelle · 08-02-2018 3:59pm

Do you have to be refused by other banks first or can you just apply

optogirl · 08-02-2018 4:01pm

autumnbelle wrote: »

Do you have to be refused by other banks first or can you just apply

I understand you've to be refused first - am really hoping they take a second look at this because it feels dishonest or at least timewasting to apply to the banks, knowing you'll be refused, just to get the letters

BattleCorp · 08-02-2018 4:03pm

optogirl wrote: »

I understand you've to be refused first - am really hoping they take a second look at this because it feels dishonest or at least timewasting to apply to the banks, knowing you'll be refused, just to get the letters

What I'd like is to be offered the same cheap interest rates that the Government are offering seeing as I am currently being gouged by the banks.

GingerLily · 08-02-2018 4:05pm

optogirl wrote: »

autumnbelle wrote: »

Do you have to be refused by other banks first or can you just apply

I understand you've to be refused first - am really hoping they take a second look at this because it feels dishonest or at least timewasting to apply to the banks, knowing you'll be refused, just to get the letters

But this is specifically for people who cannot get a mortgage through a bank?
If you can get a mortgage with a bank why would you use this instead? It would be very unfair on people who genuinely cannot get a mortgage/sufficent mortgage.

quadrifoglio verde · 08-02-2018 4:06pm

autumnbelle wrote: »

Do you have to be refused by other banks first or can you just apply

You need two refusals for finance of the same amount that you're applying for with the bank

autumnbelle · 08-02-2018 4:27pm

GingerLily wrote: »

But this is specifically for people who cannot get a mortgage through a bank?
If you can get a mortgage with a bank why would you use this instead? It would be very unfair on people who genuinely cannot get a mortgage/sufficent mortgage.

Because you would have a fixed rate of 2% for full term of the mortgage

Government Funds Local Authority Housing Scheme

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