Affordable housing Dunlaoghaire Rathdown-Parkview, Belarmine & Thornwood
- Thread starter Artois
- Start date
Hi Mac & theste
Thanks for the very informative posts above.
I beleive this AF scheme is very fair and a good idea. Essentially you have a silent partner who asks for nothing except that they get the money they put up if you sell within the first 10 years.
I would of thought having the property properly valued would be of great relevance. The following is an example of my understanding of how clawback works. I'd like to know if I have got the wrong end of the stick.
PURCHASE PRICE.................... OPEN MARKET PRICE.................. % PROCEEDS TO YOU*
........300k......................................€400............................. 75% OF SALE PROCEEDS
........300K..................................... €600 .............................50% OF SALE pROCEEDS
*rate would improve after first 10 years.
Hi Artois,
From what I gather it is like this:
Original price = €600K, Your cost €300K - discount 50%
If the price increases - say €700K when you sell you owe the council €350K thats 50% of 700K.
However if the price decreases say to €400K since your €300K is protected, the council is owed €100K. This means as prices drop the clawback is eaten away. If property prices continue to fall to €320K you can get out with just €20K. But if they fall past the clawback mark you'd be into negative equity. It would take a significant fall for this to occur.
The statute I refer to is here:
http://www.irishstatutebook.ie/2002/en/act/pub/0009/sec0009.html#partii-sec9
Clause 9-3-d
In an increasing price situation the smaller the clawback the better it is for you and it maybe worth pointing out to the council that the BSQ are overvalued currently to try to lower the clawback rate, the problem being that they might not except this and keep the figure provided by the developer many months ago.
From what I gather it is like this:
Original price = €600K, Your cost €300K - discount 50%
If the price increases - say €700K when you sell you owe the council €350K thats 50% of 700K.
However if the price decreases say to €400K since your €300K is protected, the council is owed €100K. This means as prices drop the clawback is eaten away. If property prices continue to fall to €320K you can get out with just €20K. But if they fall past the clawback mark you'd be into negative equity. It would take a significant fall for this to occur.
The statute I refer to is here:
http://www.irishstatutebook.ie/2002/en/act/pub/0009/sec0009.html#partii-sec9
Clause 9-3-d
In an increasing price situation the smaller the clawback the better it is for you and it maybe worth pointing out to the council that the BSQ are overvalued currently to try to lower the clawback rate, the problem being that they might not except this and keep the figure provided by the developer many months ago.
theSte,
That is an excellent post. There is so much confusion out there about AHI.
It is a relief to know that unless the apartment/house drops below the actual value paid by us that we are protected from negative equity.
That was a major concern of mine considering the current housing climate.
Regarding current market value and clawback, I believe it is the Affordable Homes Partnership that would need to contacted regarding reducing current market value. This is the case for AHI scheme with Fingal anyway.
That is an excellent post. There is so much confusion out there about AHI.
It is a relief to know that unless the apartment/house drops below the actual value paid by us that we are protected from negative equity.
That was a major concern of mine considering the current housing climate.
Regarding current market value and clawback, I believe it is the Affordable Homes Partnership that would need to contacted regarding reducing current market value. This is the case for AHI scheme with Fingal anyway.
Mac198
The statute theSte refers to above confirms this:
'(d) Where the amount payable under paragraph (a) would reduce the proceeds of the sale (disregarding solicitor and estate agent's costs and fees) below the price actually paid, the amount payable shall be reduced to the extent necessary to avoid that result.'
The statute theSte refers to above confirms this:
'(d) Where the amount payable under paragraph (a) would reduce the proceeds of the sale (disregarding solicitor and estate agent's costs and fees) below the price actually paid, the amount payable shall be reduced to the extent necessary to avoid that result.'
I have my interview with DLRCC scheduled for week after next. Good to hear that its nothing major. So does this mean that it should all be fine? That I'll get an offer (for when/where ever) and then its just AIP?
I'm a complete newbie and buying on my own so have no clue what to expect!!!
I'm a complete newbie and buying on my own so have no clue what to expect!!!
Hi Rabbits,
It seems that the biggest difficulty people seem to encounter under affordable scheme is getting finance. If you haven't started saving you should start, as you will be asked to forward a letter of loan approval in principal to DLRD Co co, in order to prove that you are able to raise anything from 220k-300k.
With regard to the legislation quoted by theste. It is good to know that we are protected if the value of the property falls below 300k and if the property did fall to the cost of purchase level it would seem to be a good opportunity to buy the council out for zero.
I would like to think that although the property market is on its knees at the moment that taking a longer term view of 5-10 years that the property market will recover and prices will exceed the 300k paid by us. If the properties ultimately appreciate then the valuation paid by us will be of great relevance.
Looking at theste's legislation the market value of the property is market value of the property at the date of sale.(I assume this should be market value on the day we close the purchase) I have quoted two relevant sections of the Housing (Miscellaneous Provisions) Act, 2002 below:-
"Y is the difference between the market value of the house at the date of sale to the purchaser and the price actually paid"
“market value”, in relation to a house, means the price which, in the opinion of the housing authority concerned, might reasonably be obtained in respect of such house, if sold on the open market;
It would seem on the basis of the above that the legislation is in our favourand accordingly we should not accept or allow ourselves to be forced to accept a valuation handed down by a developer or be an interested auctioneer many months ago.
It seems that the biggest difficulty people seem to encounter under affordable scheme is getting finance. If you haven't started saving you should start, as you will be asked to forward a letter of loan approval in principal to DLRD Co co, in order to prove that you are able to raise anything from 220k-300k.
With regard to the legislation quoted by theste. It is good to know that we are protected if the value of the property falls below 300k and if the property did fall to the cost of purchase level it would seem to be a good opportunity to buy the council out for zero.
I would like to think that although the property market is on its knees at the moment that taking a longer term view of 5-10 years that the property market will recover and prices will exceed the 300k paid by us. If the properties ultimately appreciate then the valuation paid by us will be of great relevance.
Looking at theste's legislation the market value of the property is market value of the property at the date of sale.(I assume this should be market value on the day we close the purchase) I have quoted two relevant sections of the Housing (Miscellaneous Provisions) Act, 2002 below:-
"Y is the difference between the market value of the house at the date of sale to the purchaser and the price actually paid"
“market value”, in relation to a house, means the price which, in the opinion of the housing authority concerned, might reasonably be obtained in respect of such house, if sold on the open market;
It would seem on the basis of the above that the legislation is in our favourand accordingly we should not accept or allow ourselves to be forced to accept a valuation handed down by a developer or be an interested auctioneer many months ago.
C
colsku
Guest
Very good info indeed.
The fact that the affordable home purchaser cannot lose money on their % is probably the reason why the council are not gonna budge on their initial and overpriced valuations. Covering their This post will be deleted if not edited to remove bad language a little bit, which is fair enough.
What would happen if one was to sell their afordable apartment for a paltry sum of 200k (i.e. the same price they paid for it from the council) to their loved one, in order to buy the council out? I presume the Council wouldnt let you sell it on for under market value...
The fact that the affordable home purchaser cannot lose money on their % is probably the reason why the council are not gonna budge on their initial and overpriced valuations. Covering their This post will be deleted if not edited to remove bad language a little bit, which is fair enough.
What would happen if one was to sell their afordable apartment for a paltry sum of 200k (i.e. the same price they paid for it from the council) to their loved one, in order to buy the council out? I presume the Council wouldnt let you sell it on for under market value...
I'd imagine alarm bells would sound with the council if an apartment was sold at for a sum far below the obvious market value. The council probably would not release their interest/charge on the property until such time as they are happy with the sale price.
ps i'd imagine there might be CAT liabilities if the revenue commissioners were to look into it as your family member would be receiving a gift, being the difference between the 200k and actual value of property.
ps i'd imagine there might be CAT liabilities if the revenue commissioners were to look into it as your family member would be receiving a gift, being the difference between the 200k and actual value of property.
C
colsku
Guest
I'd agree with all that Artois... Just a thought.
What would you think about the possibility of using the rent-a-room scheme in a one bed?
What would you think about the possibility of using the rent-a-room scheme in a one bed?
I'd imagine that scenario could work. You could be living in the sitting room on a sofa-bed. Tenant could be in other room paying off some of your mortgage.
However, if the plan is simply to rent the whole apartment, you would be breaking the terms of the scheme and if the council found out about it, they could force you to pay the difference between the price paid by you and the market valuation at the time of purchase. There would also be stamp duty issues if you were caught renting out the property during the first five years. So in summary not living in the place would not be a great idea and is probably illegal.
However, if the plan is simply to rent the whole apartment, you would be breaking the terms of the scheme and if the council found out about it, they could force you to pay the difference between the price paid by you and the market valuation at the time of purchase. There would also be stamp duty issues if you were caught renting out the property during the first five years. So in summary not living in the place would not be a great idea and is probably illegal.
C
colsku
Guest
I totally agree. There would also be moral issues which I would be guilty about.
The reason I'm on the scheme is a lack of money to buy my own place, so I have sounded out a good mate to live with me for the first year. I'm on the sofa, he's got the bed.
I hope the council would not have an issue with that.
The reason I'm on the scheme is a lack of money to buy my own place, so I have sounded out a good mate to live with me for the first year. I'm on the sofa, he's got the bed.
I hope the council would not have an issue with that.
Hi
We are all in this boat because we can't afford to buy in the area without help from the local authority. It sounds like you have have a good mate there and i cannot imagine any reason why you should encounter problems if your on the couch. It would be the same score if your lover moved in and helped you with the mortgage.
Welcome aboard Nicky. I think the five year thing relates to stamp duty. In the normal course first time buyers are exempt from stamp duty provided they live in the property however if the first time buyer does not live in the property they become liable for stamp duty as if they purchased as a investor. This is what is known as claw-back, claw-back only applies if a house is rented out within the first five years from the date of purchase.
You cannot let out the whole apartment until you have either bought the council out or alternatively 20yrs have passed since purchase. If you were to let the whole apartment out in the first 5 years you would have to square things with both the council and the revenue commissioners re the clawback of stamp duty.
We are all in this boat because we can't afford to buy in the area without help from the local authority. It sounds like you have have a good mate there and i cannot imagine any reason why you should encounter problems if your on the couch. It would be the same score if your lover moved in and helped you with the mortgage.
Welcome aboard Nicky. I think the five year thing relates to stamp duty. In the normal course first time buyers are exempt from stamp duty provided they live in the property however if the first time buyer does not live in the property they become liable for stamp duty as if they purchased as a investor. This is what is known as claw-back, claw-back only applies if a house is rented out within the first five years from the date of purchase.
You cannot let out the whole apartment until you have either bought the council out or alternatively 20yrs have passed since purchase. If you were to let the whole apartment out in the first 5 years you would have to square things with both the council and the revenue commissioners re the clawback of stamp duty.
Hi Artois,
Thanks for the great reply!! Hopefully I shouldn't be too bad. I've been paying plenty of rent for the last while and also have the 'ole SSIA money so hopefully that should help. The issue of getting a mortgage on my own is the part I'm probably most worried about.....will I get enough of a mortgage, how much of a deposit will they be looking for etc. The same questions of any person buying I suppose.
We'll see soon enough anyway!
Thanks for the great reply!! Hopefully I shouldn't be too bad. I've been paying plenty of rent for the last while and also have the 'ole SSIA money so hopefully that should help. The issue of getting a mortgage on my own is the part I'm probably most worried about.....will I get enough of a mortgage, how much of a deposit will they be looking for etc. The same questions of any person buying I suppose.
We'll see soon enough anyway!
For the Beacon South Quarter its a 3% deposit they are looking for.
Don't forget though that the "maintenance fees" really add on - we are talking around €2K a year possibly more depending on size of the apartment - thats €167 a month on top of your mortgage!
Don't forget though that the "maintenance fees" really add on - we are talking around €2K a year possibly more depending on size of the apartment - thats €167 a month on top of your mortgage!
At least thats more achieveble than the full 10% these days. I know, maintenance fees are a killer. Sandyford and Stepaside seem to be the areas that will be on offer. I know Stepaside probably gives a bigger space but realistically for commuting, Sandyford would probably be better. Its a dilemma, isn't it. Is it normally a case that you get the offer you are given or are you given a choice from the pool of places currently available to them does anyone know?
Spoke with DLR COCO this morning. The list of people for BSQ has been with Sherry Fitz since the end of October. They are expecting them to contact people this side of Xmas. Olga said the apartments for affordable housing were in Cubes 8. She also said the booking fee would be €5000 rather than 3%. Apartments will be different sizes - allocation of them depends on your place on the list that went to Sherry Fitz and how quickly you put down your deposit.
Thanks Mac,
Sherry Fitzerald must be afraid that we will lower the tone of the place. They have not released the next phase of apartments to the market on the basis that there is an over-supply, i assume.
I can't see any reason why they are not pushing the affordable properties at the moment while things are slow.
It seems we have two options:-
1. Ring Sherry Fitzerald and ask them what they are at.
Sherry Fitzerald will get fed up of hearing from us and eventually do their job and start offering the apartments. We get in earlier, stop paying rent earlier and ultimately pay off our mortgages earlier.
2. Sit tight.
In the present market the longer they take to offer us an apartment the lower the open market price will be at the point of sale. Therefore lower clawback.
In my case i'm pretty much fed up of renting but i'll be guided by the forum.
Sherry Fitzerald must be afraid that we will lower the tone of the place. They have not released the next phase of apartments to the market on the basis that there is an over-supply, i assume.
I can't see any reason why they are not pushing the affordable properties at the moment while things are slow.
It seems we have two options:-
1. Ring Sherry Fitzerald and ask them what they are at.
Sherry Fitzerald will get fed up of hearing from us and eventually do their job and start offering the apartments. We get in earlier, stop paying rent earlier and ultimately pay off our mortgages earlier.
2. Sit tight.
In the present market the longer they take to offer us an apartment the lower the open market price will be at the point of sale. Therefore lower clawback.
In my case i'm pretty much fed up of renting but i'll be guided by the forum.