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Buying council out of AF

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  • 09-04-2008 7:53am
    #1
    Tony255
    Registered Users Posts: 420 ✭✭


    Hi all,

    Do any of you know if it is possible to buy the councils share from an affordable house? I am just wondering long term if the value of the house falls dramatically can I offer to buy them out at the market value of the house at that time.

    Regards
    Tony


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    #2
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Tony255 wrote: »
    Hi all,

    Do any of you know if it is possible to buy the councils share from an affordable house? I am just wondering long term if the value of the house falls dramatically can I offer to buy them out at the market value of the house at that time.

    Regards
    Tony

    No.
    Its not like the shared ownership scheme.
    If you keep the property longterm (aka for 20 years) you will have fulfilled your obligation to them and they will no longer have a vested interest in the property.
    The aim of the scheme is to help FTBs purchase their first property, full stop, nothing else.


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    #3
    Shelli
    Closed Accounts Posts: 919 ✭✭✭Shelli


    Actually, in the most recent mailout to those on the list for AF it states that you are allowed to re-mortgage your property at any time (at market value) and pay the clawback to the council, thus releasing your property from the scheme.

    Taken from affordablehome.ie:
    "When you buy your affordable home, you get it at a discount to other similar properties in the market. The clawback is based on the percentage discount you get when you buy your affordable home. If you decide to sell or remortgage your home, the local authority applies this percentage to the price you get for the sale."


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    #4
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Thanks for that Shelli- looks very interesting.
    I suppose you would have to qualify for a 100% mortgage from a lending institution sufficient to cover the current market price, and then you would also have to come to an agreement with the Council/Authority as to what a fair current market price is (not sure how you'd come to an agreement on this one- particularly given the bizzare valuations they put on a lot of properties initially). It would be a 100% clawback on the then market value (up to year 10, and on a reducing scale thereafter). The big problem here will of course be how to determine a fair market value, without actually selling the property.


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    #5
    Shelli
    Closed Accounts Posts: 919 ✭✭✭Shelli


    Very true, becuase you are esentially "selling" the property to yourself. I'm guessing the Council would decide the value, in which case it most likely would not work out to your advantage. If you could get your own valuation it would def be worth looking into, espically towards the end of this year when the prices (fingers crossed) fall.


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