Concern about council's valuation of house

Hi,
I'm about to sign on the dotted line for an affordable house in Cork.
I'm concerned however that it may be a noose around my neck.
The council has had the property valued, probably 6 months ago, at 320k.
My mortgage providers valuer has placed a value of 265k on it. Allowing for a conservative estimate that still leaves a big gap.
So in 10 or 12 years if i have a family and want to move i could be left with a situation where i have been paying a huge mortgage for those years and sell the property and am left with zero deposit for a new home.
The council will be left with all the appreciation and i'll be back worse than square one.
This seems at odds with the objective of getting people on the property ladder. By the way this affordable housing thing is a bit of a misnomer. I'll be paying 41% of my net income on the mortgage. THe average for first time buyers is 25%. What the hell is going on in this place. There are so many better countries why do we put up with it.

Any thoughts?

Re: Concern about council's evaluation of house

Are the council offering the house to you for €320k? - how does that constitute 'affordable housing'?

If you have €320K to spend, why not see what other stuff is on the market?

Re: Concern about council's evaluation of house

I'd imagine 320 is the full price which the OP receives a discount on. If you don't think you can afford it then don't buy it. Or try and get the council to drop it's valuation.

Re: Concern about council's evaluation of house

I got my house's market value in Dublin dropped from 465k to 440k (our valuer reckons its worth 410k TOPS!

We're still paying 320k for it though, so as you say, hardly the 'affordable' it pruports (sp?!) to be!

Its gonna be brutal when we go to sell it...but we'd not be able to afford near as big a house ourselves....catch 22 really!

I do think though, that the councils seem to have overvalued across the board, in all estates, nationwide, and its something I think should be addressed.

Re: Concern about council's evaluation of house

Thanks for taking the time to respond.

The council are selling it to me for 205k and have had it valued at 320k.

I got quite a blank response when i contacted the council. They said it was independently valued and didnt understand my concern.

Phibbleberry: What did you have to do to make that happen.? Should i offer to get a third evaluation paid for maybe?

Thanks again.

Re: Concern about council's evaluation of house

Re: Concern about council's evaluation of house

m4rt said:

Hi,
So in 10 or 12 years if i have a family and want to move i could be left with a situation where i have been paying a huge mortgage for those years and sell the property and am left with zero deposit for a new home.
Any thoughts?

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To be honest that doesn't leave you in any different a position to non-affordable house buyers. If I buy a house now valued at €400k and sell it in 10 years for €300k I'm not going to be left with anything either. The only consolation is that if your house decreases in value, in all likelihood so will the one you want to move to.
And for the record, my non-affordable house mortgage repayment is 43% my net pay too and I bought it for €250k 6 years ago! Back then my salary wouldn't have qualified me for affordable housing, even though the same figure would now.
If you can't afford it or think it's too expensive then don't buy it, no point in giving yourself something to stress about for the next 20 years.

Re: Concern about council's evaluation of house

Phibbleberry said:

We wrote a letter to the council, the AHP and the developer....and took it from there. There was a lot of chasing etc...but in the end they had them revalued.

We're still paying a higher clawback than we're getting 'discounted' which I think is very unfair, but I really don't know where to go from here. I've since lodged another complaint, requesting they be looked at again, but it was all but ignored.​

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I guess that's the problem, who do you complain to that is independant of the process (not the council/developer/bank) and who has the authority to do anything? Is the AH scheme regulated, and if so by who and what real powers do they have?

I'd presume that council involvement would give them some sort of power? Not sure who they're accountable to ultimately though?!

Its all very grey...

Thanks everyone.

Phibbleberry I dont think i want go through that. Might be easier to ring Joe Duffy . I dont have the time because i've stalled as long as i can and i dont want to loose the place.

The council's valuation is probably high but I can live with it. I am single at present so talk of family may be immature or even wishful thinking!

I just want my foot in the door, literally, but i'll ask my solicitor what he thinks of the valuation when i see him. Maybe I am expecting too much of security from the council and should be exposed to the same risk as everyone else.

Thanks again.

Have a read of this thread http://www.askaboutmoney.com/showthread.php?t=60445 If you are not happy with your valuation it is possible to get it changed-i did! But it is hard going,many phone calls and emails. I got my dublin apts market price reduced from 345k to 328k meaning my clawback will be reduced by 4% or so. This will only benefit me though if i sell it down the road.But with the AH i feel we're in a better position than normal buyers as we cant go into negative equity!
There is always someone in charge, you'll find that out pretty soon by ringing every avaliable no. you have (theyll be the one who dont ring back/in a meeting/on holidays ) Once you find that person, keep any correspondance short and to the point and leave feelings out of it i.e. dont launch into a friendly rapport with them. Treat it like a business transaction and you will feel it easier to be harsh with them when needs be. Good luck!

thanks swordshead.
I'll think about this over the weekend and see if i have time to do this and not loose the place in the process. When i think more about it it's not an unreasonable request.

They can't be seen to take your house away from you cause you question something that is quite obviously merited!

THEN you'd certainly have reason to go to Joe Duffy!!

m4rt said:

thanks swordshead.
When i think more about it it's not an unreasonable request.

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Nope its definitely not! I got a few people (incl my solicitor) believe it or not saying more or less to be grateful that i got offered something! Just because its affordable housing doesnt mean we should just accept whatever is given to us, or accept whatevers told to us! You have to think of the bigger picture, yes, you may be getting a fantastic reduction initially but you have to think of what you may have to deal with if you sell it years down the line and weigh up your options. Just because its affordable housing dont feel afraid to speak up and ask questions!

m4rt said:

thanks swordshead.
I'll think about this over the weekend and see if i have time to do this and not loose the place in the process.

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Sorry...just one more thing! The deadlines they give you for accepting the offer etc is not as rigid as you may think. If you accept it and put a booking deposit down (which is refundable) you have a bit of leeway with time. Dont feel rushed into agreeing to things you're not happy with...you'll be very surprised how the deadlines can be extended! I stalled my official acceptance by nearly 2 weeks after the supposed deadline as i was waiting for them to come back with a new valuation. Just bear that in mind! Also try and find someone in a similar position (thats what a few of us in dublin 15 did)..safety in numbers and all that!