Affordable Annoyance

Vegeta

I have been offered an affordable house in my locality and I am delighted

There is only one thing that is annoying me about it and was wondering is there anything I can do about it

Its a 3 bedroom town house, my cousin just so happens to have bought one of these houses and moved in about 2 months ago.

He paid 242,000 for his house, the same market price as the one offered to me is.

So here is the problem, his house has a heat exchange central heating system and the one offered to me does not. This system is about 5k to install.

So I am wondering how the houses can be valued the same when one clearly has a superior heating system?

I have rang the council to confirm the system is not part of the house spec so the builder is not chancing his arm by not installing it.

Is there a provision to get the value of the house lowered? Apologies if this is unclear

laurak265

Congratulations on your new house! Unfortunately i don't have the answer to your question but i'm sure they would have to give you a price drop of get the builder to install the heating system for you!! Push for it anyway and again best of luck with your new pad!

Vegeta

laurak265 wrote: »

Congratulations on your new house! Unfortunately i don't have the answer to your question but i'm sure they would have to give you a price drop of get the builder to install the heating system for you!! Push for it anyway and again best of luck with your new pad!

Thanks a mil

Its very annoying though as the builders have left the sytem out so it needs to be retro fitted into the house which means digging up floor boards, ruining plastered walls etc.

The house is not 100% finished yet though

The builder said he'd have to be paid to install it. This has annoyed me no end.

astrofool

House prices rarely reflect what money has been spent on them, especially extra's such as a heat exchange central heating system, it usually leads them to sell faster, but not at any more than the market rate.

e.g. if you spend 30,000 on an extension, the value of the house might go up more or less than 30,000 depending on the utility the extension gives. In a small house it might make the house much more livable, but on a big house, it might be completely unnecessary, and could devalue the house if it leads to a reduction in outside space, for example.

Vegeta

astrofool wrote: »

House prices rarely reflect what money has been spent on them, especially extra's such as a heat exchange central heating system, it usually leads them to sell faster, but not at any more than the market rate.

Ok if offered house A and house B, both are identical in ever way (including price) bar a 5 grand heating system. Which would you take?

If I try and sell the house (in the distant future) and there is another house of the same type for sale they have a big bargaining stick to beat me with

I agree with you on principle but in this case I reckon the system would make a difference to market value as it is such a prominent feature in the other houses. It takes up the whole first page of the estates brochure.

Daith

Unfortunatley this tends to be a "feature" of affordable housing. Houses are earmarked as affordable, builders know they will be sold to the council so why put the effort or extras in to attract buyers?

However from a councils pov they provide housing. They don't care that you may be planning to sell later on.

Vegeta

Daith wrote: »

Unfortunatley this tends to be a "feature" of affordable housing. Houses are earmarked as affordable, builders know they will be sold to the council so why put the effort or extras in to attract buyers?

However from a councils pov they provide housing. They don't care that you may be planning to sell later on.

Its really frustrating to be honest.

As its my first house is part of the process getting the house valued?

meathstevie

Vegeta wrote: »

Its really frustrating to be honest.

As its my first house is part of the process getting the house valued?

Good solid wall for the safe ?

Vegeta

meathstevie wrote: »

Good solid wall for the safe ?

First thing I was looking for

astrofool

Vegeta wrote: »

Ok if offered house A and house B, both are identical in ever way (including price) bar a 5 grand heating system. Which would you take?

If I try and sell the house (in the distant future) and there is another house of the same type for sale they have a big bargaining stick to beat me with

I agree with you on principle but in this case I reckon the system would make a difference to market value as it is such a prominent feature in the other houses. It takes up the whole first page of the estates brochure.

It's usually first come, first served on desirable features, in the past, getting an end plot or a larger south facing garden was decided this way in many residential estates.

There will also always be one of the apartments with a more desirable location, one will be furnished more to the taste of the buyer, the list could go on, all these could effect the selling price more than a heating system, but at the end of the day, the effect on the market price of a property is largely down to it's location and it's size, extra's don't usually have much effect.

Anyway, valuations can be the same even though one has a 5k heating system.

Vegeta

astrofool wrote: »

Anyway, valuations can be the same even though one has a 5k heating system.

Thanks for the advice

My worry is that the second we take ownership of the house it will drop in value by a few grand (probably unfounded but I am a bit of a control freak).

Problem is we have not yet seen the spec list for the houses so all of these things are coming as disheartening surprises

I am going to pay for the system to be installed as it really is a great addition to the house but I was annoyed that it wasn't a) included or b) value of house reflected lower spec.

cheers astro

Daith

Make sure you get the house valued and see if you can get your clawback reduced based on that.

I have no doubt that the current valuation was done when the housing market was in better shape and doesn't reflect current pricing.

Vegeta

Daith wrote: »

Make sure you get the house valued and see if you can get your clawback reduced based on that.

I have no doubt that the current valuation was done when the housing market was in better shape and doesn't reflect current pricing.

Ohh this can be done. This is exactly the type of thing I was looking for

Is this common. I assume this has nothing to do with the construction company.

I get the house valued and then contact the council, how willing will they be to lower it based on a lower valuation

Daith

Vegeta wrote: »

Ohh this can be done. This is exactly the type of thing I was looking for

Is this common. I assume this has nothing to do with the construction company.

I get the house valued and then contact the council, how willing will they be to lower it based on a lower valuation

It depends. I think it's fairly difficult if you have signed contracts etc. However if you haven't (just accepted the offer) I would pursue this as much as possible. This would be more in your interest than the heating!

Check Askaboutmoney, there's been some threads on this there.

pigeonbutler

Vegeta wrote: »

My worry is that the second we take ownership of the house it will drop in value by a few grand (probably unfounded but I am a bit of a control freak).

The value of the house is 100% inconsequential and 100% theoretical unless you are actually selling it. If my understanding is correct there are restrictions on selling an affordable house for a certain period anyway so why care what the notional value of the house is "the second you take ownership".

Daith

pigeonbutler wrote: »

The value of the house is 100% inconsequential and 100% theoretical unless you are actually selling it. If my understanding is correct there are restrictions on selling an affordable house for a certain period anyway so why care what the notional value of the house is "the second you take ownership".

The only restriction (well for selling) is that you need to payback the clawback amount. If you sell in 10 years, it's the full amount and then it decreases each year after that until 20 years.

Which is why getting a correct valuation and trying to get the clawback reduced is important.

Vegeta

Daith wrote: »

The only restriction (well for selling) is that you need to payback the clawback amount. If you sell in 10 years, it's the full amount and then it decreases each year after that until 20 years.

Which is why getting a correct valuation and trying to get the clawback reduced is important.

That's it exactly

No contracts signed yet. Thanks Daith

davidoco

Vegeta wrote: »

So here is the problem, his house has a heat exchange central heating system and the one offered to me does not. This system is about 5k to install.

So I am wondering how the houses can be valued the same when one clearly has a superior heating system?

All (or most) houses have a heat exchange central heating system. You heat the water in your (oil or gas) boiler by heat exchange and your rads pass heat to the room by heat exchange.

Do you mean that he has an air heat exchanger, no vents on outside walls, but unit that takes hot stale air and return fresh warm air. If so, without proper mainteance and proper sealing of the house these things can end up costing you money. Also a lot of people like airing out the house during the day (even in winter) - you cannot or should not do that with an air heat exchanger.

johnnyskeleton

Vegeta wrote: »

My worry is that the second we take ownership of the house it will drop in value by a few grand (probably unfounded but I am a bit of a control freak).

You're getting 50% of your house paid for by the government, and all you can think of is whether you get a free heating system or not.

Put another way, even if the house does drop by 5 grand, you're still getting €237,000 from the government.

My advice is that you should refuse the affordable housing offer and buy privately. Let someone who is in real need of accomodation, rather than someone out to get a designer house, receive the benefit of the affordable housing scheme instead.

astrofool

johnnyskeleton wrote: »

You're getting 50% of your house paid for by the government, and all you can think of is whether you get a free heating system or not.

Put another way, even if the house does drop by 5 grand, you're still getting €237,000 from the government.

My advice is that you should refuse the affordable housing offer and buy privately. Let someone who is in real need of accomodation, rather than someone out to get a designer house, receive the benefit of the affordable housing scheme instead.

Stop being ridiculous, this is not social housing, and buyers who are taking on a large mortgage deserve to investigate the place fully before commiting to buying it.

The conditions for being able to avail of affordable housing are beyond what most people in the country earn, so this type of vetting is expected, but they come with the downside of a 20 year clawback period, and limited to certain types of houses (max: 3 bed, usually apartments).

Also, remember, that €237,000 is paid by the developer (who prices his other apartments accordingly), and not the government.

johnnyskeleton

astrofool wrote: »

Stop being ridiculous, this is not social housing, and buyers who are taking on a large mortgage deserve to investigate the place fully before commiting to buying it.

I'm not saying they shouldn't get their solicitor to make sure that there is good marketable title with no defects, nor am I saying that they shouldn't get a surveyor to make sure that the building is sound. But when it comes to extra fittings such as a heating system, it's a bit rich (IMO) to complain that this is not included in an affordable house.

astrofool wrote: »

Also, remember, that €237,000 is paid by the developer (who prices his other apartments accordingly), and not the government.

I'm open to correction on this, but isn't it the council who pays the other half. I can't see a developer selling houses at half price out of the goodness of his own heart. The money comes directly from the local councils (for example, Galway CC is apparently overspending it's budget for affordable houses at the moment).

SkepticOne

astrofool wrote: »

Also, remember, that €237,000 is paid by the developer (who prices his other apartments accordingly), and not the government.

Are figures published for this? I thought the developer got paid at cost but that councils subsidised the amount further to bring it down to an affordable price.

DonJose

At the end of the day its the taxpayer who picks up the bill!!!

The_Conductor

SkepticOne wrote: »

Are figures published for this? I thought the developer got paid at cost but that councils subsidised the amount further to bring it down to an affordable price.

Correct.
If Astrofool know differently- perhaps he/she might like to enlighten the rest of us?

Vegeta

johnnyskeleton wrote: »

You're getting 50% of your house paid for by the government, and all you can think of is whether you get a free heating system or not.

Its far from all I can think about and its not 50%

Put another way, even if the house does drop by 5 grand, you're still getting €237,000 from the government.

Well to start I don't get 237,000 euro and secondly if the house is revalued its 5 grand less the goverment has to pay of OUR tax money. How dare I prevent them from paying too much for the house. None of the saving will be passed on to me btw as the price has been set with the developer, I still have to pay the same amount so I gain nothing (in the short term) from having the value lowered.

My advice is that you should refuse the affordable housing offer and buy privately. Let someone who is in real need of accomodation, rather than someone out to get a designer house, receive the benefit of the affordable housing scheme instead.

Wow you sound really bitter, yeah I should just be grateful for every scrap I can get :rolleyes:

I have already said I am delighted to have gotten the house. What else do you want me to say, I am very grateful to get it.

Its nothing to do specifically with the heating system, as I said there are other houses in the estate valued exactly the same but they have the system and the house I was offered does not. When you put two houses beside each other and one has superior extras (its not just the heating system btw wardrobes, flooring etc) but they are priced the exact same well then questions have to be asked.

I have no problem paying for and installing the system myself. I just want the house value (which doesn't effect the amount I pay for it, its too late for that) to reflect the spec OR make the spec match the value.

I don't know why I'm even responding, you think I should just take what I'm given and be happy with it, even if the house is below par for the estate, that's not a good idea or practice. Its in the governments (county councils) interest to get the houses valued properly.

Vegeta

DonJose wrote: »

At the end of the day its the taxpayer who picks up the bill!!!

Welllll I'm a tax payer too

The_Conductor

Totally aside from the heating system- house prices are falling at around 1% per month (obviously this varies from month to month- but it has slowed down to about .9-1% from 1.35% in January- but you get the picture).

It is in your interests, as indeed the tax payers interests, to ensure that the valuation on the house is a current OMSP valuation- what would the house fetch on the open market, were the developer to try to sell it in that manner.

As per numerous other threads in this forum- several people have successfully petitioned their councils to have the properties in this scheme revalued to reflect the new market conditions- and you should do likewise (totally aside from the heating system, which is a red herring).

S.

Vegeta

smccarrick wrote: »

Totally aside from the heating system- house prices are falling at around 1% per month (obviously this varies from month to month- but it has slowed down to about .9-1% from 1.35% in January- but you get the picture).

It is in your interests, as indeed the tax payers interests, to ensure that the valuation on the house is a current OMSP valuation- what would the house fetch on the open market, were the developer to try to sell it in that manner.

As per numerous other threads in this forum- several people have successfully petitioned their councils to have the properties in this scheme revalued to reflect the new market conditions- and you should do likewise (totally aside from the heating system, which is a red herring).

S.

Thanks for the info

Vegeta

smccarrick wrote: »

(totally aside from the heating system, which is a red herring).

S.

As I said in the previous post this is not the only spec difference (heating unit in fire place is over 2 grand, flooring down stairs not sure of price, built in wardrobes not sure of price, heating system is 5k approx) but the heating system is the only one that bothers me as it should reduce running costs

The_Conductor

When you say Spec difference- did you have a specification spelt out in your original contract that they are not following through on (or are you simply comparing it to the other house which sold for the same price?)?

Unless you have a contract stating the specifications of the property- and this contract has clearly been breached, then unfortunately you have no come back whatsoever.

Your cousin may have gotten different specifications- that however is totally irrelevant to your own case. What probably happened is the developer had undertaken to supply X number of properties to the council for the affordable housing scheme- but discovered that even outside of this number that they had a considerable number of other properties which they could not shift (which probably were spec'ed differently) and they offered X number of these higher spec'ed properties to the council at the same price. The council nabbed what they could afford- and the rest is history.

Its unfortunate timing really.

You still need the Open Market Selling Price (OMSP) of the property re-adjusted to reflect the fall in price since they were originally valued.

Vegeta

smccarrick wrote: »

When you say Spec difference- did you have a specification spelt out in your original contract that they are not following through on (or are you simply comparing it to the other house which sold for the same price?)?

Unless you have a contract stating the specifications of the property- and this contract has clearly been breached, then unfortunately you have no come back whatsoever.

Your cousin may have gotten different specifications- that however is totally irrelevant to your own case. What probably happened is the developer had undertaken to supply X number of properties to the council for the affordable housing scheme- but discovered that even outside of this number that they had a considerable number of other properties which they could not shift (which probably were spec'ed differently) and they offered X number of these higher spec'ed properties to the council at the same price. The council nabbed what they could afford- and the rest is history.

Its unfortunate timing really.

spot on really, the largest problem is we have not seen a contract yet. Its very early days. Got notification last week, paying booking deposit today (refundable).

My cousin bought the house about 12 months ago from the developer not the council but it was only finished 2 months ago (phase 2). So I am comparing a normal house in the estate to an affordable house in the estate.

You still need the Open Market Selling Price (OMSP) of the property re-adjusted to reflect the fall in price since they were originally valued.

Fully intend to do this now that I know others have. It was a combination of things that led me here, he bought the house 12 months ago at 242,000 euro and here we are 12 months later (with supposedly falling house prices) and they value the house the same! Even though his is quite superior internally.

They (developer and council) probably agreed on the price 12 months ago too which might explain it

Again thanks for your time and knowledge. I greatly appreciate it

EDIT: Just to add I really don't want to seem ungrateful because I am not. I just cant believe the council agreed to that price or didn't negotiate a better spec (and it annoys me). They have a financial interest in the house for 20 years after all