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Rent to Buy in Dublin?

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  • 24-06-2015 2:58pm
    #1
    i23098
    Registered Users Posts: 10 ✭


    With the new rules, it's very hard to buy a house as normal people can't save money and pay a hugely inflated rent, and the new trend of banks seems to be Buy-to-Let, instead of Let-to-Buy :(

    Is there anywhere in Dublin (ideally Dublin 3 or 5) a rent-to-buy scheme?


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    #2
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    Rent to buy is a broken system. Banks generally don't agree the rent paid counts as a deposit, valuations are a mess, etc.

    I'd want agreement from a bank to such a system before you do anything, which they're unlikely to give you.


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    #3
    i23098
    Registered Users Posts: 10 ✭i23098


    The way I see it, it would be the best system in the current market... The rules set out in 2010 (http: / / blog.myhome.ie/2010/07/21/dublin-city-council-rent-to-buy-scheme/) seemed ok.

    * The purchase price of the property is agreed before you move in.
    * If you do decide to buy the property, 80% of the rent you paid is offset against the purchase price


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    #4
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    i23098 wrote: »
    The way I see it, it would be the best system in the current market... The rules set out in 2010 (http: / / blog.myhome.ie/2010/07/21/dublin-city-council-rent-to-buy-scheme/) seemed ok.

    * The purchase price of the property is agreed before you move in.
    * If you do decide to buy the property, 80% of the rent you paid is offset against the purchase price

    If you get a bank to sign up to this ahead of time, then fire away. The problem is the scheme you linked to doesn't exist anymore and is based on the defunct affordable housing scheme. I expect you will run into trouble as others have when getting the mortgage approval on a privately run rent to buy scheme.

    Then if you're setting aside 80% of the rent for the deposit, there's the issue of who's going to do the landlord job for 20% of the rent.


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    #5
    i23098
    Registered Users Posts: 10 ✭i23098


    Michael D Not Higgins wrote: »
    If you get a bank to sign up to this ahead of time, then fire away.

    That's why I'm asking ;)
    Michael D Not Higgins wrote: »
    The problem is the scheme you linked to doesn't exist anymore and is based on the defunct affordable housing scheme.

    Again, that's why I'm asking :p I would like to know of any similar schemes that might exist nowadays...
    Michael D Not Higgins wrote: »
    I expect you will run into trouble as others have when getting the mortgage approval on a privately run rent to buy scheme.

    Not sure what trouble you refer to, but there should be no troubles if all is agreed upfront will all parties.
    Michael D Not Higgins wrote: »
    Then if you're setting aside 80% of the rent for the deposit, there's the issue of who's going to do the landlord job for 20% of the rent.

    Noone will do the landlord job for 20%. Either in the end of the rent contract (3 years in that old scheme, I would say given house prices, 5 years would be better) people won't buy and the landlord gets 100% of the rent, or at the end of the contract the house is bought and the "landlord" becomes the seller, earning the agreed sale price + 20% of paid rent (as only 80% deducts on agreed selling price).


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    #6
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    i23098 wrote: »
    That's why I'm asking ;)



    Again, that's why I'm asking :p I would like to know of any similar schemes that might exist nowadays...



    Not sure what trouble you refer to, but there should be no troubles if all is agreed upfront will all parties.



    Noone will do the landlord job for 20%. Either in the end of the rent contract (3 years in that old scheme, I would say given house prices, 5 years would be better) people won't buy and the landlord gets 100% of the rent, or at the end of the contract the house is bought and the "landlord" becomes the seller, earning the agreed sale price + 20% of paid rent (as only 80% deducts on agreed selling price).

    I've already outlined the trouble with them. If you find a scheme and talk to a bank and they're okay with it then go ahead but the problem is getting the bank to sign up to it in the first place (hint: they won't).

    What I was saying about the landlord is that should you follow through with buying, the seller is effectively the landlord for 3-5 years with all the responsibilities, costs, etc. associated with that and only 20% of the income. This is why valuations become an issue, because developers were hedging against a falling market and also overvaluing to get more return against the house. The bank would then take issue in their underwriting.


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