Affordable House, Should I Turn it Down??

Mr. Skeffington

Hi I have recently been offered an Affordable Apartment from D.C.C and I would appreciate some advice. The thing is that the apartment was valued at 430k when the affordable housing preference sheet was completed 1 year ago, I estimate that in the market currently the apartment would only be worth 360k. Its a 2 bed apartment in Laburnum Cottages, Ashtown, D15 by the way.

So the clawback percentage would be based on the difference between the market value at the time I completed the form 1 yr ago (430k) and the affordable price of 250k. So I think that I may be better off turning down the apartment as prices are still falling and I would imagine that an apartment in that area in 12 - 18 months could be purchased for not to far off the 250k that I am being offered the property at now by D.C.C. I would therefore be in a position to choose a location and not be tied to the D.C.C stipualtions re renting the complete property and selling etc.

So am I mad and should I jump at the chance to purchase this property, or should I give it a miss and wait to see what happens? My parents seem to think its a big deal and that I should thank my lucky stars that I was picked however I am feeling somewhat sceptical..

Keith C

Put it this way, even though house prices are falling, will you be able to afford one on your own without the scheme (say sometime next year)?
If your answer is no, then take full advantage of the scheme.
The clawback shouldnt be the factoring point on whether you accept this. Do you think you get on the scheme, live in the house for a few years, sell the house, pay the clawback then use the profit to buy your own place??
The scheme is meant to be for people, who cant afford a home, to buy for the forseeable future, not for those looking to get a foot on the "property ladder", which is what you seem to be doing given your "dilemma" on the clawback issue.

warrenaldo

can they not re-value the appartment.

tHE vAGGABOND

yea, it sounds like you almost want to buy it, live in it for a few years and then let it or sell it...

In which case, not wanting to be overly horrible or anything, I do hope you turn it down, so someone who *really* needs it can get it

Your getting a large 6 figure sum off the price of the place, if thats not good enough for you *shrug*

The_Conductor

warrenaldo wrote: »

can they not re-value the appartment.

Thats the course of action I would take- petition the council to have the apartment re-valued at fair market prices. Have any sold in the locality lately- and if so, at what price? Everything is worth what its purchaser is willing to pay for it- as Publius Sirus put it almost two thousand years ago. Just because the builder is putting a nominal value of 430k on it, does not mean that he has even a snowballs chance in hell of getting it on the open market. At the moment, given the fact that its only a 2 bed, its an apartment, and its D15- I would be surprised to see it at over 320k on the open market (never mind anywhere else). That 430k price tag is a pure daydream on the part of the developer.

warrenaldo

The OP is more than entitled to buy a place off the affordable housing and sell it on in a couple of years. What is wrong with that? People move on in life - circumstances change.

And if the OP is getting a large 6 figure sum off the price of the place - then sells it and ends up owing the council a massive amount more than its worth. And thats if he sells it tommorrow.

You think just because the OP has been offered he should be over the moon and be delighted about the possibility of getting into major debt.

Tony255

tHE vAGGABOND wrote: »

yea, it sounds like you almost want to buy it, live in it for a few years and then let it or sell it...

In which case, not wanting to be overly horrible or anything, I do hope you turn it down, so someone who *really* needs it can get it

Your getting a large 6 figure sum off the price of the place, if thats not good enough for you *shrug*

not sure that you understand how the affordable housing scheme works with a reply like that. If the OP's circumstances change in 2 years and he needs to move to a bigger place then why should he have to pay 180k clawback making the total paid 430k on a property that is then only valued at 320k. These scheme's are designed for people who cannot afford to get on the ladder, the houses are not sold for 250k from the council and then left at that. Can you honestly say that if you buy a house today you will live in it for 20 years because if the OP sells in 19.5 years he will still be stuck with a portion of the 180k clawback .

dont get me wrong i am not having a go at you but it gets to me when people look at affordable homes as a golden home opportunity and that the buyer should be over the moon that they are getting a "free home" and should jump at the chance. Whats worse is that each council seems to have a different procedure for affordable homes and they also have the attitude that you should be happy with what you get as if 200k isnt a lot of money.


I am also stuck in a similar situation where the house is valued by the council at 300k but they are selling privately for 250-260k i have not yet been offered one so it is not such a big deal yet but i am on the waiting list and would not know what to do if i was offered one.

Mr. Skeffington

yea, it sounds like you almost want to buy it, live in it for a few years and then let it or sell it...

In which case, not wanting to be overly horrible or anything, I do hope you turn it down, so someone who *really* needs it can get it

Your getting a large 6 figure sum off the price of the place, if thats not good enough for you *shrug*

1) It is not my intention to live in the property for a few years and let it or sell it for commercial gain. I am a single guy who could meet someone, have a few kids and may want to move to a more family orientated area, not in a 2 bed apartment.

2) Thanks for your nice sentiments, I may turn it down and leave someone else to the possible debt. Believe me, I am deserving of an affordable house. I have worked hard since I left college 7 years ago and can not afford a home as prices have gone mad since I started working. I have rented in crappy accomodation for the last 7 years.

3) 6 figure sum off the price of the place that is overvalued, in reality yes it is not good enough.

The_Conductor

Mr. Skeffington- there have been a few threads on here where people have had the value of their affordable homes reduced on negotiation with the council. Dublin 15 has seen a massive number of small apartments going up (along with some residential estates like those in Mulhuddart, Ongar and Clonee)- while it is commuter territory- a 2 bed apartment might not be the most saleable thing in a few years time- and certainly does not warrant the current valuation put on it. I am not being cruel- but 310-320 would be a far more realistic valuation (unless it has massive selling points that have not been spelt out).

A further thing to keep in mind is the annual management charges associated with most modern developments. In many cases they are kept artificially low in early years- and then rocket as reality hits and the periodic costs (such as repainting buildings, redoing woodword etc) all begins to bite.

Find out as much as possible about the development and make sure you are fully informed before going to the council to try to negotiate a revaluation.

S.

Mr. Skeffington

Thanks S, some good advice.

Mailman

http://www.ireland.com/newspaper/property/2007/1206/1196838981191.html#

this article mentions a drop of 100,000 on asking prices of apartments in Ashtown. This development has pretty much set the ceiling for market value on 2 bed apartments in the whole D15 area.
If your apartment has a fictional market value above this then walk away.

clawsthefirst

you can have the place revalued with dcc, friend of mine was recently in the exact same situation, so she paid to get the valuation done herself and then sent it to her solicitor who renegotiated the clawback with the council. she also found out that if a situation arises where she goes into negative equity she wouldn't be expected to pay any clawback.