Affordable housing unfairness

[shnaek]

As stated earlier you can sell whenever you want and book the profit - an affordable buyer cannot.

That isn't entirely true. I know of a case where the council bought houses at €190k, they were selling them as affordable at €140k. The current market value of the house was €300k. But as far as they were concerned the discount you were getting was €50k, not €150k

 

[birdy]

The one thing I have noticed with all the participants of this series is that they have very little savings. Is this not why people move home or never move out in first place. I rent in Dublin & am trying hard at the moment to save and have to cut back on lifestlyle to do so.I People who live at home on the series don't seem to do so at all.

 

[Glenbhoy]

That isn't entirely true. I know of a case where the council bought houses at €190k, they were selling them as affordable at €140k. The current market value of the house was €300k. But as far as they were concerned the discount you were getting was €50k, not €150k

Anyone have details on how the clawback's work? I would have thought that it would have been quite penal (given how stamp duty legislation is applied).

 

[Lorrie]

Hi
I have an affordable house for 4 years approx. I don't have the details of the clawback with me but I have recently enquired about buying out the local council and paying my mortgage to BOI. I have been approved for this but am holding off a few weeks. There was a note on correspondence from Council stating - "19.05% of the selling price must be paid back to XX borough council plus above redemption figure on this Housing loan when selling above house (refer to Housing (Miscellaneous Provisions) Act 2002).

I am not selling the house as I want to stay there. I just wish to change mortgage and borrow a little extra for some home improvements. I currently owe €91,817 on house. Similar house nearby sold recently for €256K. Interest rate with Council is 3.5%.

 

[Samson26]

Anyone have details on how the clawback's work? I would have thought that it would have been quite penal (given how stamp duty legislation is applied).

I posted on the first page of this as to how the clawback is working if you want to check that out!!

 

[irishpancake]

Anyone have details on how the clawback's work? I would have thought that it would have been quite penal (given how stamp duty legislation is applied).

the quote below is taken from the Fingal CoCo [broken link removed]

5. CAN I SELL THE PROPERTY?
Homes purchased from the Council under the Shared Ownership/Affordable Housing Scheme can be sold. In the event of re-sale the seller must pay back to the Council any remaining mortgage or rented equity still owing and the clawback percentage of the actual amount the property is sold for.

The clawback percentages vary from property to property. These are set at time of sale and are based on the sale price and the market value price of the property.

The amount payable to the County Council reduces each year after year 10. The clawback no longer applies after year 20.

Example

House sold after five years for €300,000
Outstanding mortgage (estimated) €125,000
Clawback (30% of €300,000) €90,000
Amount owing to County Council €215,000
Balance €85,000

 

[Glenbhoy]

Sorry Sansom, missed that!
Anyway, it is quite strict, as it should be imho.

 

[lff12]

It does seem unfair but offering you a mortgage you aren't going to be able to afford for 25-35 years isn't particularly fair either.

 

[Badger]

I did nt see the programme myself, but I heard something about someone who was over the income threshold (40K) but managed to get around this somehow. True? If so how?

 

[brodiebabe]

Was there a new scheme that allowed you earn up to 56k?

 

[theBatMan]

That nurse should not have officially qualified for that affordable housing scheme.

That scheme was not the normal affordable housing scheme, it was a special scheme. In order to qualify for it, applicants had to earn between €30,000 and €56,000.

Applicants also had to have a deposit for the house of at least 3%. Her SSIA was not immediately available.

She owed her parents €4,000 and had savings of €2,000.

Her salary was €27,000.

Applicants also had to prove that they had saved at least €700 per month for the past three months.

The only reason she was given the chance to purchase the house was because she was on the programme.

 

[vladamir]

what's all the talk (on the first page of this thread) about civil servants getting multiples of their mortgage.

any mortgage advisors/bankers out there that can comment on this?

i'm a permanent civil servant for many years now (earning a good bit more than said nurse) and i wasn't allowed borrow anything near what she was offered!! and i was allowed a few years up the 'pay scale' in terms of my earnings - which would have put me considerably above her earnings.

ps. had no other borrowings as i know this impacts negatively on the amount advanced.

 

[Badger]

That nurse should not have officially qualified for that affordable housing scheme.

That scheme was not the normal affordable housing scheme, it was a special scheme. In order to qualify for it, applicants had to earn between €30,000 and €56,000.

.

Would you mind posting more details of this scheme please batman?

 

[irishpancake]

Would you mind posting more details of this scheme please batman?

Could this "Special Affordable" scheme be this, as referenced in the

Eligibility for Part V housing

You are eligible to buy an affordable house provided under Part V of the Planning and Development Acts 2000-2002 if 35% of your income is not sufficient to enable you to buy a house. If you get your loan from the local authority and your gross household income was below 28,000 euro in the previous tax year, you will be entitled to a subsidy that will reduce your mortgage payments. This subsidy will be paid to the local authority. The subsidy is between 1,050 euro and 2,550 euro per year. A clawback similar to that which applies under the Affordable Housing Scheme is payable if the house is sold with 20 years of purchase.

 

[shnaek]

Applicants also had to have a deposit for the house of at least 3%. Her SSIA was not immediately available.

Legally her SSIA is immediately available as she can withdraw the money any time. She would loose the government top up however.

 

[minion]

There is definitely something wrong with this scheme.
Someone who can afford a 300K house just as much as the next person should not be allowed to get a house for more or less half price.
Also, i dont like the idea of a single person taking up a house with 2 bedrooms on this scheme.
They should be reserved for couples or families.
And she can make a pretty penny even if she sells it tomorrow.
Lets say she sold for €300K and the house cost her €200K.
She sells tomorrow for €300K.
Profit = 100K
The council take 50% of the profit leaving her with €50K for a days work.
Have i got it wrong ?
I wish i could do this.

 

[theBatMan]

Would you mind posting more details of this scheme please batman?

Information on the scheme is available on the SDCC website at:

[broken link removed]

It does not have all the information on it. I learned most of the information by speaking to a SDCC councillor.

There was definitely a bit of underhandedness about the person on the TV programme...

 

[theBatMan]

Legally her SSIA is immediately available as she can withdraw the money any time. She would loose the government top up however.

Good point, but then she would have had 9k instead of 12k. Her salary is still below the threshold, and she owed money to her parents. I wonder if she discoled this on the application form? Unlikely...

 

[Glenbhoy]

There was definitely a bit of underhandedness about the person on the TV programme...

Lads, leave the girl alone - by any criteria she is exactly the type of person who affordable housing scheme's are supposed to help. Low income (but secure, with decent increments), works in (in a very valuable job) and is originally from the locality.

 

[theBatMan]

Lads, leave the girl alone - by any criteria she is exactly the type of person who affordable housing scheme's are supposed to help. Low income (but secure, with decent increments), works in (in a very valuable job) and is originally from the locality.

I agree with you on principal here, but the scheme is designed for people who meet the criteria. She did not meet the criteria and should not have been afforded the option of purchasing an affordable house.