Affordable Housing

joePC

Thanks for the comments,

"Yes but you'll be paying rent on the balance? My advice would be to mortgage as much as you can afford."

So can I for example bank morgage for €180,000 and use the sharded owenership to lend me the other €70,000?

Is there any details on the web about the sharded owenership loans, interest rates, T&C etc... the new DCC site has nothing on it.

Thanks, Joe

Bingles

Fianlly, FINALLY after 5 long weeks trying to sort out Life Insurence we have light. We should be in our house the first week in may.

The trouble we had getting it was just unreal. I was very ill 5 years ago and all the Insurence companys tried charging us through the roof. It was so dishartning. The stress levels have been through the roof. I can tell you.

Drapper

Mufflets wrote: »

Hi All,

I Just wanted to share my dilemma and see if anyone is in the same boat or can help.
The Ringfort development is administered by fingall Co Co and its big, consisting of over 150 houses.

I have been offered and accepted one of theses houses under the affordable ownership initiative (similar scheme to the affordable ownership except it moves a lot quicker but you get less of a discount/Clawback at around 27%)

Anyway the problem arose when my bank valued the house at 30K less than the councill did, (you get your own mortgage under this scheme)this was understandable since the councill valued the houses
over six months ago. but was a big problem for me as the bank would not mortgage the house as the contract stood with this inaccuracy.

I explained the story to Fingall and they are at present re-valuing the houses at Ringfort. i am one of the first to be offered a house there but they did say "We are getting revaluations done so i presume they are re-valuing others as well"

Anyway they are now proposing to revalue the houses but leave the cost price to the likes of me or anyone else out there who has been offered one of these houses the same. this would leave me/us a discount of no more than 17% which would be very unfair with every other development getting a discount of at least over 25%.

And possibly uneconomical ,with builders accepting offers of up to 15% less than market value on private developments with no mention of Clawback, or being tied to one mortgage provider etc.

I have written to the Councill to explain the above as politely as i could and pointed out that i ,or anyone else would be much better off waiting for the next development, in the hope that they will leave the clawbacks/discounts as they are make and it again a great deal to move to Ringfort.

I would ask anyone who is in the same boat to write a similar letter and/or to contact me (ill give you a copy of mine if you want).

All constructive suggestions welcome.

you are entitled to a revised valuation under the housing act 2002 sec 9. The valuation should be set at the date of signing by the purchaser not 6 months before:-

1. ask for thier valuation
2. get your own valuation makesure your comparables are sound!!
3. formaly write and confirm they revise it
4. refuse to sign contracts unless this has been sorted
5. highlight the act Housing Miscellaneous act 2002 sec 9 and quote it to them!

Important this is addressed as your clawback will be wrong and too high if you agree to the councils values.


D

starky

Mufflets wrote: »

Hi All,

Anyway they are now proposing to revalue the houses but leave the cost price to the likes of me or anyone else out there who has been offered one of these houses the same. this would leave me/us a discount of no more than 17% which would be very unfair with every other development getting a discount of at least over 25%.

And possibly uneconomical ,with builders accepting offers of up to 15% less than market value on private developments with no mention of Clawback, or being tied to one mortgage provider etc

I do see your dilemma, alright. What kind of figures are we talking? How much is the price that the are selling it to you for? And how much are the council valuing it?

It seems to me that you would be better off just buying one of these units privately.
17% discount really does not seem like all that much when you take into account all the conditions that come with an affordable unit.

On the other hand, can you afford to buy the unit by your self with out any discount? If you can’t then buying it and having your claw back reduced from 27% to 17% is a great deal. You will easily be able to buy it out in a few years if you want to sell up. I am getting a 52% discount on the place that they offered me in the docklands, so I cant really ever see how I will be able to buy them out, but I am happy to live in the place for 10-15 years so its not really a problem for me.

I get the impression that you main issue here is that you are not getting the affordable housing price reduced in the first place. I am not sure if the council will budge on this. I think the prices that they set are the build cost of the unit and so if they were to reduce it they would be losing money, but that is just a guess.

Best advice is try to buy it privately if you can, and steer clear of the AHI. The value of the property could even fall again over the next year by 10-15% anyway. If you cant then I would take the 17% discount and try and buy them out ASAP after the sale.

Mufflets

Thanks for the replys folks

Cantab. wrote: »

Is a 17% discount really worth it? I mean, you'll be stuck in the same location for the next 20 years, there's a high risk of having social housing in your vicinity and you'll have to pay this "council fee" which is around the 2k mark according to reports.

Im begining to think your right. However Im hoping others being offered in same estate see it the same way, in which case the councill have to put the discount back as it was.

3. formaly write and confirm they revise it
4. refuse to sign contracts unless this has been sorted

originally :market value €340k Discount/clawback 25% cost to me €255K

After i did the above

Market Value €312 (got mail of the details today) Discount 18% cost to me €255K

Important this is addressed as your clawback will be wrong and too high if you agree to the councils values.

This is the revised councill valuation and the way they want it to go now, draper.

It seems to me that you would be better off just buying one of these units privately.
17% discount really does not seem like all that much when you take into account all the conditions that come with an affordable unit.

Again probably right starky. Its an all councill estate.
And i cant go private my mortgage is touch and go at €255

connundrum

Could I just ask if people are made properly aware of the Yearly Service Charge they will incur (in managed properties only)? Would the council make you aware of these fees at an early stage or when?

I just remember getting all the application forms through the door regarding new developments I could apply for, what the mortgage repayments/deposit would be etc. I don't remember seeing anything about Service Charges in the initial mix?

I ask as a friend has bought an affordable apartment in Dublin CC, where her yearly service charge is €2400, which obviously adds on €200 per month on top of her mortgage. This added cost now makes the apartment not affordable, and she feels massively let down as she wasn't made aware of it to begin with, and certainly wasn't expecting the cost to be so high.

I queried it with her saying things like - how did you think your bins were going to be collected, who did you think would pay for the roof garden to be maintained, the cleaning of the building? She didn't have an answer as she actually didn't think about it. For her the whole process was a bit rushed and it was all about the deposit and mortgage.

I guess I'll just leave this as a warning to prospective buyers, although many people would already have known about management companies and agents and everything entailed with them.

Drapper

connundrum wrote: »

Could I just ask if people are made properly aware of the Yearly Service Charge they will incur (in managed properties only)? Would the council make you aware of these fees at an early stage or when?

I just remember getting all the application forms through the door regarding new developments I could apply for, what the mortgage repayments/deposit would be etc. I don't remember seeing anything about Service Charges in the initial mix?

I ask as a friend has bought an affordable apartment in Dublin CC, where her yearly service charge is €2400, which obviously adds on €200 per month on top of her mortgage. This added cost now makes the apartment not affordable, and she feels massively let down as she wasn't made aware of it to begin with, and certainly wasn't expecting the cost to be so high.

I queried it with her saying things like - how did you think your bins were going to be collected, who did you think would pay for the roof garden to be maintained, the cleaning of the building? She didn't have an answer as she actually didn't think about it. For her the whole process was a bit rushed and it was all about the deposit and mortgage.

I guess I'll just leave this as a warning to prospective buyers, although many people would already have known about management companies and agents and everything entailed with them.

your buying an apartment, who did you expect to pay the managment fees? i think its a case of the purchaser needing to do thier homework and ask all the questions before they buy!

irlrobins

Drapper wrote: »

I think its a case of the purchaser needing to do their homework and ask all the questions before they buy!

Caveat emptor

The_Conductor

Drapper wrote:

your buying an apartment, who did you expect to pay the managment fees? i think its a case of the purchaser needing to do thier homework and ask all the questions before they buy!

Most new developments, and not just apartments, have management companies and fees associated with them. Its been this way for at least the last 10 years. It very much is a case of the buyer having to do their homework- but it is equally the case that a lot of developments are structured with very low management fees at the outset which increase dramatically after a couple of years, as periodic work comes up. There are several threads in this forum discussing these matters- I'd seriously suggest you google them and get a list of pertinent questions together to pose to the developer (not the council- who really have very little to do with this).

I would also encourage any owneroccupiers of these developments to contact their local members of the oireachtas and get them to table motions about having these charges made tax deductable (preferably fully) for owneroccupiers- as these people are at an automatic disadvantage- particularly against people who buy these units as buy-to-let properties.

S.

byte

€2,400 per year!! :eek: Jesus, that's a lot!

When we were approved for our affordable house, we were told that teh first year would be waived, although now this is not the case. However, it's only €500.

Maybe being in Donegal has advantages after all!

The_Conductor

byte wrote: »

€2,400 per year!! :eek: Jesus, that's a lot!

Depends. My sister is paying 4,300 in Smithfield while my brother is 4,000 on Parkgate street. My own is less at under 2,000- but it really depends on what the money must be spent on- lifts, automatic gates, security cameras and the likes all eat money. A nice simple development without these might get away with insurance, a little gardening, a little painting and a reasonable sink fund- but that would be very much the exception.

starky

smccarrick wrote: »

Depends. My sister is paying 4,300 in Smithfield while my brother is 4,000 on Parkgate street. My own is less at under 2,000- but it really depends on what the money must be spent on- lifts, automatic gates, security cameras and the likes all eat money. A nice simple development without these might get away with insurance, a little gardening, a little painting and a reasonable sink fund- but that would be very much the exception.

Your saying your sister pays €4,300 per year in management fees? That is off the wall. I had no idea that management fees had reached those sorts of levels. That’s nuts. That’s 360 per month, basically a 20K car payment. She must have a few bob! ;-)

smooth operater

starky wrote: »

Your saying your sister pays €4,300 per year in management fees? That is off the wall. I had no idea that management fees had reached those sorts of levels. That’s nuts. That’s 360 per month, basically a 20K car payment. She must have a few bob! ;-)

Her management fees alone are more than what im paying to rent a room for a year.
That is shocking

markpb

Wow. I hadn't a clue anywhere was that expensive either! €2,400 was the most expensive I've heard about before now.

What are those places like, are they run well? I appreciate having lifts and security adds a lot to the cost but over 4k seems a bit steep.

The_Conductor

starky wrote: »

She must have a few bob! ;-)

Shes a solicitor- but she needs to let out two rooms under the rent-a-room scheme to cover this and other household bills.

It does cover security, numerous electronic gates, video intercom, landscaping, lifts in each block, refuse, building insurance and a few other things. Its pricey as hell- and more than 4 times what it was 7 years ago when they built the block (Cuckoo Lane behind the Fyffes banana ripening factory). She has a lovely apartment- but its an ongoing expense I'd not be willing to sign up to.

Shelli

Anyone know when the nect DCC round of affordable housing is going out?

Stephen P

As far as I can recall the preference forms have gone to the printers and will posted out then. I think the closing date for the forms to be returned is 11th April but don't quote me on that.

Stephen P

stephen p wrote: »

As far as I can recall the preference forms have gone to the printers and will posted out then. I think the closing date for the forms to be returned is 11th April but don't quote me on that.

The confirmed closing date is noon on 11th April.

Stephen P

Just a quick update on my situation, looking for feedback/advice...

Background...
Bought an affordable apartment in July 07, purchased it at 149K, worth 333K on open market Feb. 07. I'm thinking about re-mortgaging or selling it. Got it valued a couple of weeks ago. Got the valuation today 265K :eek: the value has dropped 68K!! There's no way it could have been worth 333K just over a year ago. Anyway, because the apartment is worth less now than when I purchased it the clawback is reduced. I was told last year the clawback was 55%. Under the affordable housing scheme if there's negative equity the clawback is reduced. So now they've reduced the clawback amount to 79K. I owe about 140K on the mortgage, so if I sold for 265K, paid clawback and paid loan (79k + 140K = 219K) and if I sold for 265K I'd make a profit of 46K. I jumped the gun before on another post with my figures, but now I have the figures it seems to good to be true. I know affordable housing is designed for someone to make a profit but 40K seems a lot. I think someone made a boo boo with the original valuation.

Feedback greatly welcome

The_Conductor

Stephen- as you're looking for feedback-
The affordable housing scheme is designed to put a roof over your head, not to help you make a quick buck.
Its really unfair to partake of the scheme and then to sell on the property within such a short period of time, when there are thousands of people on waiting lists who would give their right arm to have been given the opportunity to buy it.

Re: the 68k reduction in price- if its an apartment, then this would be about right. Apartments have lost a lot more of their value than houses have- and probably have a lot further to go.

Just because the apartment is now valued at 265k does not mean you will get 265k tomorrow if you try to sell it. Property is taking improbably long times to shift, and the boot really is on the other foot. Be prepared to have to re-adjust your expectations even further south, if you really want to sell it.

S.

Afuera

stephen p wrote: »

Just a quick update on my situation, looking for feedback/advice...

I thought that if there was negative equity the clawback was calculated like this:
Clawback = Current Market Price - Affordable Purchase Price

Plugging in the figures you provided would mean that you owe a clawback of 116k (265-149 = 116) not 79k. Where did you get the figure of 79k from?

smooth operater

stephen p wrote: »

Just a quick update on my situation, looking for feedback/advice...

Background...
Bought an affordable apartment in July 07, purchased it at 149K, worth 333K on open market Feb. 07. I'm thinking about re-mortgaging or selling it. Got it valued a couple of weeks ago. Got the valuation today 265K :eek: the value has dropped 68K!! There's no way it could have been worth 333K just over a year ago. Anyway, because the apartment is worth less now than when I purchased it the clawback is reduced. I was told last year the clawback was 55%. Under the affordable housing scheme if there's negative equity the clawback is reduced. So now they've reduced the clawback amount to 79K. I owe about 140K on the mortgage, so if I sold for 265K, paid clawback and paid loan (79k + 140K = 219K) and if I sold for 265K I'd make a profit of 46K. I jumped the gun before on another post with my figures, but now I have the figures it seems to good to be true. I know affordable housing is designed for someone to make a profit but 40K seems a lot. I think someone made a boo boo with the original valuation.

Feedback greatly welcome

I dont think thats the idea behind it.............

Stephen P

Thanks for the feedback. I understand the whole reason behind affordable housing and I didn't enter the scheme to make a quick buck. People's circumstances change. When I purchased the property it wasn't my intention to make a profit when selling and I certainly didn't expect the market value to plummet that much.
The figure of 79K was given to me by the council, I have it in writing.
I don't expect to get 265K for it. I'm getting it valued again by an estate agent to see what they come up with. The valuation I got done a couple of weeks ago was done by the council. Looking at other apartments in the area I reckon they will value it in around 265K. If this kind of situation happens with a lot of people I don't know why the rules of affordable housing aren't more stricter. I'm not the kind of person who is out to make a quick buck.
I can understand how it must look but how the council come up with the figures and valuation is out of my hands.

smooth operater wrote:

Originally Posted by stephen p
Just a quick update on my situation, looking for feedback/advice...

Background...
Bought an affordable apartment in July 07, purchased it at 149K, worth 333K on open market Feb. 07. I'm thinking about re-mortgaging or selling it. Got it valued a couple of weeks ago. Got the valuation today 265K the value has dropped 68K!! There's no way it could have been worth 333K just over a year ago. Anyway, because the apartment is worth less now than when I purchased it the clawback is reduced. I was told last year the clawback was 55%. Under the affordable housing scheme if there's negative equity the clawback is reduced. So now they've reduced the clawback amount to 79K. I owe about 140K on the mortgage, so if I sold for 265K, paid clawback and paid loan (79k + 140K = 219K) and if I sold for 265K I'd make a profit of 46K. I jumped the gun before on another post with my figures, but now I have the figures it seems to good to be true. I know affordable housing is designed for someone to make a profit but 40K seems a lot. I think someone made a boo boo with the original valuation.

Feedback greatly welcome

I dont think thats the idea behind it.............

LOL that was a typo, I meant to say "I know affordable housing is NOT designed for someone to make a profit..."

smooth operater

well thats fair enough, peoples circumstances obviously do change, which makes affordable housing a big turn off.
However if that clawback calculation is correct :eek:, congrats man

Afuera

TBH, I think someone in the council may have stuffed up their calculation of your clawback.

It does not make much sense that the council would initially pay 184k worth of your property and then give you a further 37k when you decide to sell in a falling market.

Overall the council will be down 221k on the transaction.

starky

Afuera wrote: »

TBH, I think someone in the council may have stuffed up their calculation of your clawback.

It does not make much sense that the council would initially pay 184k worth of your property and then give you a further 37k when you decide to sell in a falling market. Overall the council will end up paying out 221k for a property that is now only valued at 265k.

I was trying to makes sense of the figures too, and I can’t either. It looks like a mix up to me too! I’d hang on to that claw back recalculation with your life ….

Afuera

starky wrote: »

I was trying to makes sense of the figures too, and I can’t either. It looks like a mix up to me too! I’d hang on to that claw back recalculation with your life ….

Glad to see i wasn't the only one struggling to make sense of it.

Stephen P

I got my information from the Affordable Homes Partnership website

Scenario 4 - Negative Equity.

If John and Mary sell their home and the market value has decreased from €280,000 to 260,000, then the clawback would be based on the lower market value of €260,000 less what they paid €196,000, which is €64,000. So they have to pay back €64,000 to the local authority when they sell in addition to any money owing on their mortgage.

Another user posted this a few pages back

The_Conductor

Stephen- using the examples in the website- and plugging in your information we get:

Stephen bought an affordable apartment. The market value of the apartment was €333,000- Stephen paid €149,000. The market value discount, or clawback, to Stephen was 55.26%

If Stephen sells his apartment within 10 years, the clawback to the council will be 55.26% of the sale value of the property, any money owed on the mortgage must also be cleared.

If the property is sold at its now quoted value of €265,000- as a negative equity scenario would now be in action- the clawback of 55.26% ie. €146,439 would not be claimed by the council- they would instead claim the difference between the sale price (i.e. 265k) and the original price paid (i.e. 149k) which is €116k- leaving you with the original price which you paid (€149k) with which to pay your mortgage off. You don't have any equity left over after the sale, and in addition have exhausted your status as a First Time Buyer- which means you will not receive favourable treatment for stamp duty purposes when you next go to purchase a subsequent property.

In the above case- the council absorbs the negative equity situation fully- by only claiming back the difference in the sale price and the original price- and not the original clawback amount. In a situation of capital appreciation- the council would gain a portion of that capital appreciation on the sale of the property (on a reducing scale after 10 years- to zero at 20 years- but at the original clawback percentage up to the 10 year mark).

It is a sort of get-out-of-jail-free card for you- while you don't get burnt with negative equity on the sale of the property (providing the property does not fall below the price you actually paid that is), you do however loose your FTB status.

Shane

The_Conductor

Ps- the above example is one of the main reasons I have advised several people who were purchasing on the affordable housing scheme to ensure that they got accurate valuations of the properties they were purchasing instead of blindly looking at the price they were paying- as there are other implications in the original valuation.