Proposal for a Generous New Grant for First Time Buyers

ted1

Eric Cartman wrote: »

the central bank rules need to stay, and be held rigidly.

people in negative equity need to realise they are staying there, and stop this nonsense of holding on to a property because they're going to lose money.

planning rules for one off houses and protected structures need to be relaxed.

this grand is a bad idea.

One off houses are s blight on the landscape and are very inefficient in providing services such as mains water, sewage, foot paths, broadband etc.

The central bank rules are fundamentally flawed
Person A lives at home with parents , has never paid a bill in their life and lives rent free so can save for a deposit.

Person B pays high rent and all their bills so can't save for a deposit.

If I was the bank is want to lend to person B who has an excellent track record of meeting their obligations.

Negative equity in Dublin is pretty much gone , prices have rising and people have being paying down their mortgage.

Wesser

If the grant us only worth 3 k, this is hardly worth even talking about. The majority if my friends are like.... 100k away from buying a house. Surely 3 k each is hardly going to spark a buying frenzy that drives prices up and up.

Seriously!!!
3k!!!!

notharrypotter

One off houses are s blight on the landscape and are very inefficient in providing services such as mains water, sewage, foot paths, broadband etc.

Do you realise you are preaching heresy;)

The famous 5 will be after you.

The majority if my friends are like.... 100k away from buying a house.

Now they will be 103K

Hazydays123

Wesser wrote: »

If the grant us only worth 3 k, this is hardly worth even talking about. The majority if my friends are like.... 100k away from buying a house. Surely 3 k each is hardly going to spark a buying frenzy that drives prices up and up.

Seriously!!!
3k!!!!

3k for a first time buyer is worth 10x 3k towards a mortgage. So prices will go up by 30k.

We'll all be mortgaged up to the hilt with an extra 5yrs of indebtedness added onto our mortgage term for the same crappy property that can be bought today at a price that a (somewhat) constrained market has decided on.
I'm sickened by this. It won't end well for anybody.

Icepick

So we can't build apartment blocks with 5 floor in most of Dublin and have one of the worst public transports in Western Europe but giving 5k is the solution.
Newsflash, a few thousand euro per buyer is not why we have a crisis.

Askthe EA

As an EA, I think this is a damn awful idea if taken in isolation. We will know more tomorrow but if it is one of a package of measures or not.

In relation to how much, Today FM were reporting a payment of up to 25% of your savings. Not sure how that works but sounds substantially more than 2-3k.

Bob24

Askthe EA wrote: »

In relation to how much, Today FM were reporting a payment of up to 25% of your savings. Not sure how that works but sounds substantially more than 2-3k.

I think the idea is 25% with an upper limit of something around 3k (basically meaning virtually no-one will actually get 25% and most people will get the maximum amount).

Hazydays123

Askthe EA wrote: »

As an EA, I think this is a damn awful idea if taken in isolation. We will know more tomorrow but if it is one of a package of measures or not.

In relation to how much, Today FM were reporting a payment of up to 25% of your savings. Not sure how that works but sounds substantially more than 2-3k.

The UK system involves a payment of up to 25% of your savings which is capped at 3k. I suppose the equivalent from sterling to euro would be a cap of 5k.

68 lost souls

The new build we are looking for worked into their contracts for phase one buyers that costs of the build may go up and they would have to pay the balance, completion was pushed out to just after the budget. I can see the costs going up now somehow?

We are hoping to buy in phase two and really hope this works out for us now but get uncertain about what the future will be like.

yqtwqxqm

Wesser wrote: »

If the grant us only worth 3 k, this is hardly worth even talking about. The majority if my friends are like.... 100k away from buying a house. Surely 3 k each is hardly going to spark a buying frenzy that drives prices up and up.

Seriously!!!
3k!!!!

If you go back 20 or 25 years it was the same. You had top be very well off and have had a good job and years of track record in savings to even talk to the bank about a mortgage.
It was only late 90's on when it became the norm to expect that everone could afford their own house. If it had continued we would now be getting a free house with a box of corn flakes.

yqtwqxqm

Or its 25% of your savings borrowed from the government, to circumvent the CB rules

Hazydays123

yqtwqxqm wrote: »

If you go back 20 or 25 years it was the same. You had top be very well off and have had a good job and years of track record in savings to even talk to the bank about a mortgage.
It was only late 90's on when it became the norm to expect that everone could afford their own house. If it had continued we would now be getting a free house with a box of corn flakes.

I agree, except with the part of having to be well off. Or at least with what constituted as wealth in the 90s.
Like a couple who had fairly ordinary jobs in teaching/nursing/gardai/civil service would have been able to get a mortgage for a 3 bed Semi-D in the 80s/90s. Now they're the working poor.

I do think that if people had had the patience to allow the CB rules to bed down and the persistence to keep up with regular saving, we could have restored some sanity to the market.

zl1whqvjs75cdy

Hazydays123 wrote: »

3k for a first time buyer is worth 10x 3k towards a mortgage. So prices will go up by 30k.

We'll all be mortgaged up to the hilt with an extra 5yrs of indebtedness added onto our mortgage term for the same crappy property that can be bought today at a price that a (somewhat) constrained market has decided on.
I'm sickened by this. It won't end well for anybody.

How do you figure that?

Askthe EA

yqtwqxqm wrote: »

Or its 25% of your savings borrowed from the government, to circumvent the CB rules

Borrowed?

Hazydays123

Askthe EA wrote: »

Borrowed?

You'll pay it back in taxes somewhere along the line/where do you think the Government got it in the first place other than through your taxes

Bob24

Joey Disgusting Honeybee wrote: »

How do you figure that?

It is roughly true if the property is worth less that 220k. In that case (and for a FTB) the maximum loan to value (LTV) is 90%, meaning the bank can lend you roughly 9 times the amount of your deposit. So if your deposit is 3k more, you can borrow 27k more, and the extra amount you effectively have available is 30k (3k governement top-up plus extra mortgage of 27k). The LTV is 80% for any amount above 220k (i.e. the bank can lend you 4 times your deposit), so if the property is in a higher bracket the 3k will give you and extra 12k for borrowing (meaning including the top-up your extra budget is 15k).

Hazydays123

donkeyoaty0099 wrote: »

How do you figure that?

Basic economics. You give a group of people who are all chasing the same commodity in the same marketplace a load of free money and you think it won't increase the price of said commodity? (which is fixed in its supply).

The banks will be delighted as you're now saddled with an extra 15-30k of debt (compared to a situation where this grant didn't exist).

gar32

The system is broken.

The government want to maximize the tax income from Builder, Land, buyer and bank. Any thing the reduces that will not be considered. In the past when people needed housing lots of suburbs where built without real town planning. Anyone who has ever played a SIM city type game knows Dublin needs high rise apartment blocks. Tax breaks for them like they did for hotels in the past could add to supply.

Outside city's the dwellings which could be used as home but are empty need tax breaks to make the owner want to repair and sell.

The government made so much money in the past from stamp duty and property dealings. Easy money in large amounts. They would love them day's to return but it was all credit the people are still paying it off.

If the EU say no social housing then tax breaks are the only way. I had FTB's twice (Divorced). I had section 23 tax credits for 10 years. I am now a LL but I would like to have a house but I have to rent as I have a family now.

The tax on rent depending on the LL is up to 50%. The tax man will always win and unless he takes a big hit the mess will last longer the any renter, FTB or someone wanting to move up in size will just have to stick it out.

yqtwqxqm

Askthe EA wrote: »

Borrowed?

Only a guess, but yes they could "lend" you the 25% and not give it to you

mjp

How does this affect people building house for first time? What is incentive for them? Apologies if its answered already in thread but couldn't see it.

_Kaiser_

TheDoc wrote: »

As a renter, who had his families home ownership prospects wiped out overnight, I love it. Couldn't give two ****s about anyone else. Just me.

I thought I was playing it smart when being approved for mortages left right and center during the recession, but we went renting to save up a bit more. Then the market went crazy, our prospects got signed off overnight and our savings got decimated with the spiraling cost of rent.

All the while the world and its mother protect those who were financially wreckless during the boom, or even more recently. Politicians and just about every advocacy group under the sun will spin the "pesky bankers screwing that poor family" shtick.

So ****it. Will happily take a grant, buy my own family home, and if **** goes south, who cares. We seem to be totally accepting of financial wrecklessness in this country, so no doubt even more legislation will come in from this popularity monster we call a government to further protect those in distress mortgage debt.

There's alot of truth in this...

As I've said here in the past, like everyone else I got the calls in the Good Times offering me near half a mil for a mortgage, loans for anything I wanted, and even a 10k credit card limit without asking for it.

But, I tried to be responsible and sensible and limited myself to a small car loan that I used to support a job move/commute and didn't take all the "free" money being thrown at me because I was already thinking "what if it went wrong a few years from now?" (as it dd when I was made redundant at the end of 2009). Incidentally, contrary to some opinion, your bills and debts don't just magically disappear along with your income, job and self-respect when you're on the dole. I don't envy anyone who has been or is in that position.

But as it's turned out I've ended up paying for it in tax increases, the loss of things like the single parent tax credit and most of the pathetically few other "benefits" that you get as a single PAYE worker for the tax you have to pay up, and various other charges, fees and levies - to say nothing of the increasing rents in the last few years that have pretty much wiped out any chance I have of owning a house in this country... DESPITE technically being on a higher salary than ever.

All while those who did over-extend themselves or frankly fudged the numbers to make the applications work have been protected at every step from losing the property they're not able to meet the repayments on - and in turn driving the costs and reducing the supply for the rest of us.

And now that the talk is again of doing something to get on the "property ladder" I can't say I'm at all surprised... we have a ridiculous obsession and entitlement culture around the notion of owning property in this country and it's reflected in measures like this, and indeed the way the rental market is viewed and managed by ALL sides (tenants, landlords, regulators and Government alike). If you're not in debt to a bank for property you have failed in this country!

But y'know what? I am likewise going to take every cent of the giveways (it's already started with PCP car finance deals exploding and the bank has already been asking me if I'm interested in their loan products - even though I only switched to them at Christmas!), and with FF soon to be back in power and already pulling the strings it's all going to happen again!

And sure, when it all inevitably collapses again, I'll do like so many did last time round and make out that the banks dragged me off the street and held me a gunpoint to sign a mortgage application, that everyone from friends, to family and politicians "told" me to do it and it's not MY fault that I did (because being an adult doesn't mean being accountable anymore after all!)

Let the good times roll!

Irish_rat

Looks like it will be backtracked to the start of this month according to Noonan.

The supply has been the problem but building in cheap fields outside Dublin is not the answer.

High rise in the city needs to happen but money over common sense prevails in Ireland.

Hazydays123

Kaiser, I couldn't agree more with everything you've said.

<mod snip- please stick to the accommodation and property angle thanks>

_Kaiser_

Irish_rat wrote: »

Looks like it will be backtracked to the start of this month according to Noonan.

The supply has been the problem but building in cheap fields outside Dublin is not the answer.

High rise in the city needs to happen but money over common sense prevails in Ireland.

High rise would only work if they were proper Euro-spec family apartments and infrastructure... but unfortunately in a country where everyone wants an anonymous shoddily-built Semi-D in a housing estate with 200 others, or a McMansion in the middle of nowhere they do things like REDUCE the apartment sizes further again.

It's not like they're massive to begin with in most cases - I'm renting a 2 bed myself only because a 1 bed was shockingly tiny (with no storage, everything on top of each other and not much cheaper), so instead I add to the problem by "taking up" a room I don't actually need, so that I can have a decent kitchen/living area.

Hazydays123

All the 'high-density' developments I've seen whilst on the market are packed with 2 beds. A 2 bed leaves you with no contingency for life circumstances changing.

You might not like the idea of bringing up kids in a 3 bed apartment but at least it would be possible if you got stuck there because of negative equity, etc.

Letree

Apartment living would be fine if soundproofing was done right. As it is i wouldn't dream of an apartment.

cronos

So I haven't signed the contract on my new build house just yet. Will be doing on Wednesday though. Also I'll just be paying the deposit now, however the sale will close pending the completion of the house in the December to February time frame.

My question is will it matter that I already have a mortgage (although won't actually confirm the mortgage until Dec/Feb). Like if I've already saved the necessary deposit will I still get all the money?

dearg lady

_Kaiser_ wrote: »

And sure, when it all inevitably collapses again, I'll do like so many did last time round and make out that the banks dragged me off the street and held me a gunpoint to sign a mortgage application, that everyone from friends, to family and politicians "told" me to do it and it's not MY fault that I did (because being an adult doesn't mean being accountable anymore after all!)

Let the good times roll!

I don't get this, I'm sure lot's of people spouted off this nonsense but by and large they still owe the money. Unless I'm mistaken and there have been large scale debt write offs?

Cuddlesworth

dearg lady wrote: »

I don't get this, I'm sure lot's of people spouted off this nonsense but by and large they still owe the money. Unless I'm mistaken and there have been large scale debt write offs?

I know personally of a few people with debts of 1 million plus written off. Makes sense, they had zero means of paying it back off.

As for why all the measures are focused at FTB. Well the answer is obvious, in order for a pyramid scheme to work you need a constant influx of new people. When first time buyers can't afford to purchase, prices will stagnate and then decline. And our government is hell bent on another property boom when they should be addressing their own shortfallings in other areas.

keane2097

MarkAnthony wrote: »

I'm sorry I know this is going to be unpopular but this is exactly whats needed.

Renters are getting absolutely screwed, because LLs are getting absolutely screwed on tax. AT LAST some of that money is going to be going back to renters. Of course it will increase house prices; brilliant! It should push my apartment to a point I'd part with it. Someone gets a grant to buy it and gets out of the rental trap, I get out of being a LL and pay a few K off my mortgage.

Of course more supply is needed. There are things that need to be done to assist that but this idea isn't the worth thing that could have happened by a long shot. Now it should be strictly controlled, and limited to certain areas but it's a step in the right direction!

Nice to hear an alternative opinion at least, whether or not the logic bears out.