Early 20's been offered a 1 Bed Affordable Apt in D12

Ive been offered a apt last week for an amount i can actual afford and get a mortgage for.

Havent viewed the apartment yet but the block and location look good. Its look like a great deal.

Two hours searching askaboutmoney about the scheme and Im now put off by it. Effectively I must live in the apartment for the next 20 yrs Or face a massive clawback.

At only 23 I have absolutely no intention to lock myself into something that restrictive, the idea of renting it later on as my circumstances changed gives me an out.

From reading about the scheme from this site thats not an option either as it triggers the clawback. However Ive come across no concrete answer to this. What does the wording of the contract with the local authority and relevant legislation say?

The scheme is far from clear, full of restrictions and ties down vulnerable first time buyers from moving up the property ladder in the future. On top of it your paying the mortgage taking all the risk and the council gets a nice slice of any increase in value if you sell. Just doesnt fell like its your property.

Im still Interested though

Im i mad to be considering actually buying this apartment? Whatever about the restrictions its a property i can afford short term anyway. Worry about the future later.

kINGKONG said:

On top of it your paying the mortgage taking all the risk and the council gets a nice slice of any increase in value if you sell. Just doesnt fell like its your property.

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But you are getting the property at a huge discount to begin with, so why should you benefit from all of the increase in value??

KingKong,
If you are happy with the apartment and its location then I would think you should seriously consider going for it. Isn't it better to be paying off your mortgage than renting and paying some one else's. It could take you years to be in a financial position to buy on the open market. If prices drop then you are safeguarded against any loss unless it actually drops below the figure you paid, which is highly unlikely. Yes if you do sell and property prices rise - which over the longer term they should - then the council get a cut of your profit but you still gain which is better than having paid rent for say five years. The reservation I would have is that 1 beds maybe hard to shift in the future. You will probably notice that most of the people on here who have raised legimate concerns, still went ahead and bought the AH homes so they most have felt it was worth the risk. Obviously in an ideal world we'd all like to buy homes on the open market but espcially in Dublin today it is just not possible for most young single professionals. One thing though you are very young and so you would want to be fairly sure that you want to stay in Dublin and working etc. If say you want to go travelling etc. and if the council are strict on not renting then you could be forced to sell and will never have the benefits of a first time buyer again.

you're too young to get tied down in a 1 bedroom apartment.

1 bedroom apartments are more suitable for renting short term than living long term.

My advice is don't tie yourself long term into a one bedroom apartment. You will regret it.

I would say go for it - I was in a position to buy in my early 20's and was advised by all and sundry not to...12 yrs on, and I'm still renting!!! Although I've been offered an AH which I'm buying!
Just a thought, but when the council say you can't rent out your property...how would they ever find out?? They'd hardly check up on every property they've ever sold in say, ten years, to see if it's rented would they? ?? Or could they?

Sideview said:

KingKong,
.....If prices drop then you are safeguarded against any loss unless it actually drops below the figure you paid, which is highly unlikely. .....

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Hi, I've a question on this as it always confused me. If the market price at the time of sale is e.g. 300k and the AH price is 200k, that is a clawback of 33%, right?

But if you needed to sell the house (within the clawback period) and the market price has dropped to 250k, do you still have to pay the clawback based on the 300k, or on the 250k?
This really confuses me sorry!

annpg said:

I would say go for it - I was in a position to buy in my early 20's and was advised by all and sundry not to...12 yrs on, and I'm still renting!!! Although I've been offered an AH which I'm buying!
Just a thought, but when the council say you can't rent out your property...how would they ever find out?? They'd hardly check up on every property they've ever sold in say, ten years, to see if it's rented would they? ?? Or could they?

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Well, 'they'/'we'(taxpayer subsidising Affordable schemes) would 'know' because (a) he must register as a landlord and (b) pay appropriate tax off the profit he is earning from renting out what is supposed to be a principle private residence. His tenant's rental outlay, declared to the Revenue on the tenant's own behalf, would also be a bit of a give-away, no?

Marie said:

Well, 'they'/'we'(taxpayer subsidising Affordable schemes) would 'know' because (a) he must register as a landlord and (b) pay appropriate tax off the profit he is earning from renting out what is supposed to be a principle private residence. His tenant's rental outlay, declared to the Revenue on the tenant's own behalf, would also be a bit of a give-away, no?

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that would be if the person is being honest/foolish enough to declare it. many people rent out rooms/properties without declaring it by making private deal with tenant that they will pay lower rent if they dont insist on rentbook etc..dishonest but... !!