Proposal for a Generous New Grant for First Time Buyers

MarkAnthony

The_Conductor wrote: »

If you don't limit it to new builds- you simply have money chasing pre-existing limited housing stock.

I can't say I agree. If they set a limit such as this they are, in Dublin, saying these areas lads. 'These Areas' are perfectly fine in the main, with one being particularly good in my opinion I won't say which :pac:. It would encourage FTBs to these areas and possibly encourage people in these areas to sell and trade up/down.

Meanwhile apartments can be bought up by investors or people who genuinely want to live in the City, with hopefully these white elephants of blocks miles from anywhere becoming a thing of the past and new builds could have a mixture of starter homes and larger homes to trade up to.

All they've really done here is exclude FTBs in Dublin from buying anything useful. We're talking smallish numbers of people here who can't raise a deposit. Well to be fair I thought that's what this was aimed at but more and more it's just looking like a bit of a tax rebate for people. Fair enough but it's not really helping who I thought it would.

The_Conductor

The_Conductor wrote: »

......... I feel a hell of a lot more sorry for suckers who bought into the starter home argument 10-15 years ago..........

So anyone who needed to buy a home 10/15 years ago who felt it suited them is a sucker?

The_Conductor

MarkAnthony wrote: »

I thought that's what this was aimed at but more and more it's just looking like a bit of a tax rebate for people. Fair enough but it's not really helping who I thought it would.

This is it in a nutshell........

My argument is unless its structured to bring new housing stock on stream (and quickly)- regardless of how you pay the money over- you're simply further inflating the price of the pre-existing (limited) stock.

elainep13

The_Conductor wrote: »

The proposal is to have an income tax rebate- backdated from the first of July, on the purchase price of the new property for first time buyers. The rebate will be limited to the first 250k value of the property- and any properties with a purchase price of over 300k are automatically excluded

I don't see any specific details on the scheme anywhere, where are people getting the purchase price 300k limit info? Buyers in Dublin are the ones who need help and you won't be able to get a new build for under 300k!?

The_Conductor

Augeo wrote: »

So anyone who needed to buy a home 10/15 years ago who felt it suited them is a sucker?

Not at all.
People bought the argument that their homes were a stepping stone- and they should buy whatever they could now- they could rely on flipping it down the road and trading up to a more appropriate dwelling.........

I'm saying we were suckers for believing the politicians- and that I genuinely feel sorry for those who are trapped in this mess.

Sorry about my use of the phrase 'suckers'- I meant it in the older rather than the newer sense of the word...........

seamus

The_Conductor wrote: »

Not at all.
People bought the argument that their homes were a stepping stone- and they should buy whatever they could now- they could rely on flipping it down the road and trading up to a more appropriate dwelling.........

I suppose framing it as "bought the argument" is mis-selling it a bit. People weren't sold a false promise or a pipe dream. It was actual reality they were seeing. For the guts of ten years from 1996 to 2006, people were buying properties and reselling them again two years later for a large markup and buying a larger property.

And then rinsing and repeating. People weren't being convinced by some slick salesman talking convincing lies - the facts were out there, thousands of people were successfully flipping small properties for big ones, and everyone could see it happening and jumped in and said "me too".

The mistake was not believing it was possible, the mistake was thinking it would always be possible.

MarkAnthony

To be fair there were people who just bought a property for themselves. Hindsight is 20/20 and of course more research should have been done etc. but if you could buy and you needed to buy, some of us bought. Not with the intention of making a huge profit but as somewhere to live.

There while I'm more than willing to take criticism where it's due, not everyone who bought during the boom was trying to get one over.

The_Conductor

I get what you're saying Seamus- however, I'll have to agree to disagree with you. If you read the Bacon reports (all 3 of them)- from 1994 onwards- it was spelt out pretty clearly what was happening. Of course the average person walking down the street bought into the 'Celtic Tiger' myth- and wanted the trappings of wealth this dream represented- including ye 3 bed semi with a nice garden for the kids, a couple of cars- and several foreign holidays every year.

It actually lasted for a long while- a hell of a lot longer than most people thought possible- however, its demise had been forecast as far back as 1994........

I personally was ridiculed here in this forum for questioning its sustainability- however, I'm not an economist........

The_Conductor

MarkAnthony wrote: »

To be fair there were people who just bought a property for themselves. Hindsight is 20/20 and of course more research should have been done etc. but if you could buy and you needed to buy, some of us bought. Not with the intention of making a huge profit but as somewhere to live.

There while I'm more than willing to take criticism where it's due, not everyone who bought during the boom was trying to get one over.

I hear you Mark- and indeed hindsight is a wonderful thing.
Its not schadenfreude on the part of those who didn't believe the hype though- in many cases its sorrow at seeing how their siblings and/or other family members- have been hung out to dry- when in fact, even walking away from their purchases would be the best course of action (if they were allowed a clean slate of course).

Our new personal bankruptcy laws are beginning to come into their own- and are working- and indeed, the stigma of being declared personally bankrupt is no longer what it once was.

Focusing solely on 'First Time Buyers' and specifying a set of rules to sell a new batch of shoeboxes- isn't the way to go though- even if it is a way of kickstarting the production of new shoeboxes.

We need to take a more inclusive look at the sector as a whole.

I await publications of how the new scheme is to work- however, the soundings and leaks thus far- are far from encouraging.

MarkAnthony

MarkAnthony wrote: »

To be fair there were people who just bought a property for themselves. Hindsight is 20/20 and of course more research should have been done etc. but if you could buy and you needed to buy, some of us bought. Not with the intention of making a huge profit but as somewhere to live.

There while I'm more than willing to take criticism where it's due, not everyone who bought during the boom was trying to get one over.

I bought in 2005, borrowed just over 4 times my salary, following year neighbours went for €85K more, I had no intention of flipping after a few years.

With hindsight I'd have liked to have 2 in 2010 rather than 1 in 2005 but such is life.

MarkAnthony

I've no issue with people like yourself/seamus presenting well reasoned arguments, and please don't think my comments were directed at you personally. Schadenfreude is a brilliant concept though and one many are quick to embrace with this. It's creating a huge amount of background noise - a problem throughout the housing 'crisis'. We need to start looking carefully at what politicians are doing and put aside any pettiness; I say that as a general point again not directed at people that disagree with me with reasoned arguments.

Heisenberg.

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The_Conductor

Heisenberg. wrote: »

This post has been deleted.

It is the traditionally sleepy time for property sales (mid to late September it normally perks up again).

I agree with you though. Why buy now- if it could potentially cost you 10k if for whatever reason you fail to meet criteria which are as yet unspecified.

KenjiOdo

This grant should be kept for after making the property purchase, like old days they gave money to buy carpets/tiles/curtains etc. It would go back into the economy a lot quicker imo, helping support jobs & the likes. They could really up the ante by giving extra grants to FTBs to go energy efficient, helping modernisation of housing stock & also helping with reduced bills..

Bob24

Heisenberg. wrote: »

This post has been deleted.

I think depending on how they look at it people can turn the argument either way.

If they think the incentive is likely to be of very little help to them they can say "get in before the rush and if I meet the criteria it will just be a bonus", but if they think it has a potential for making a significant difference to them, they can also think "lets wait and see to make sure I meet the criteria".

But yes you are right, it is just more uncertainty which is never good.

TheDoc

_Kaiser_ wrote: »

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!

Your spot on. I'm similar to you. I'm currently on my highest salary I've ever earned, my career just went strength to strength as did my salary all through the recession, and yet I'm worse of then ever. Granted it's multi faceted, forking out €1250 a month for two years didn't help.

Genuinelly just going to happily take whatever comes my way. Cause I've seen now and realise now how our country works. Not that I didn't know already, but having paid my water bills seeing it as such a blatantly obvious thing to do, to see so many dribblers and tinfoil hat warriors get away scott free, has just totally changed my entire outlook on this country. Then the GE happened and I was very much just "**** this noise"

Few pages have mentioned 3k as the potential we are talking about here. To be honest, that is literally nothing to help the situation at all. So its really not even worth getting excited about, or getting worked up over.

I thought it may provide some weight against the paramters. So for example I've paid X tax in 5 years, so weight that against the mortage cap, or I don't know, something. 3k for me is basically my Net bonus, of which I get twice a year *shrug*

What's obliterating me is the cap on x3 salary. I'm the single income in the house, with my GF staying at home, raising our daughter, and another bundle of joy to arrive in Sept. It freaks me how our state just completely disregards stay at home men and woman, as if they arn't doing anything. My GF does the most important work in our household and I'm blessed to have her being a wonderful mother raising an amazing daughter.

So I've the wonderful situation of looking at home ownership, where I'd be looking for a 3bed house minimum, and I'm so nowhere near the marker in terms of the salary cap. To qualify I'd be needing to earn in excess of €85k a year, bit much at my age to be fair with my career mostly in front of me.

So we carry on, locked into the rental market with no real regulation, no certainty and just about any diasater lingering around the corner.

I got so dismayed start of this year, I basically just blew my savings. Watched my family basically scraping by month by month so we could chuck a few bob here and there into savings. Got pretty sick of two years just providing the bare minimum for my GF and daughter, who like I'm sure anyone else, wants to provide the best for their family. So just said **** it, gave GF half my savings, and I blew mine on **** that made me happy.

Walter H Price

mel123 wrote: »

Seriously, FTB already have a 'perk' with the amount of deposit they need compared to non first time buyers.
Is it not time the government looked at schemes to help people who want to trade/upgrade their home and find themselves in an impossible situation either due to negative equity or the twenty per cent deposit rule? Its like ok, you have a house, we dont need to help you, when personally I think a shift in this market might actually help the situation.

its pretty obvious why there is no incentive for the govenment to help these people, as in they already have a private house. The focus here seems to be to free up space in the rental market to bring prices down again. any policy should be focused mainly in Dublin becasue thats where the biggest issue is.

The hope is if you incentives first time buys , they will buy and vacate their rental property increasing supply and slightly lowering demand this should then see prices begin to drop back and the knock on could be eventually getting a few families out of hostels over time.

TheDoc

Hazydays123 wrote: »

If you need a 30k deposit then a 3k grant will make very little odds to you.

If you have the means to even get close to 30k savings then you would have that 3k saved in a few months extra anyway without this Government intervention.

You don't seem to understand the basic economic principles of supply and demand. This measure will push up prices. Your analysis is that prices need to go up in order to encourage building? Why doesn't the Government directly incentivise building schemes rather than making you and I take the hit through an inflated purchase price and a crippling mortgage?

Say you have 19k saved and all you need is another 3k to have the deposit for your dream 220k property.
The government gives you a 3k grant, so now you have your deposit-happy days!
But everybody else in the market also gets this 3k grant. They can also afford your dream property. People who had a larger amount than you in the first place also get this grant. A bidding war commences. The property goes for more than it ever would have achieved without this artificial injection of cash. If you couldn't have afforded the property in the first place, you've probably lost it anyway.

How are you doing better in this situation?

Your describing a situation that already happens, except now its reaching down to the FTB who barely enter the arena because of a grant.

Bidding wars, phantom bids, EA's ****ing people over, sellers withdrawing from sale agreed putting people in the lurch, buyers over-extending in desperation to sign up.

These things happen already, a 3k grant isn't going to exasperate the problem any further.

A 3k grant is really not going to sort anything for anyone. At most this is a little lump sum to help FTB's furnish their newly bought house or take a holiday or do something nice after the stress of buying a house.

In the grand scheme of things, where in the areas around me anyway, where a family home is costing anywhere between €280k-€320k, what the hell is 3k?

I really don't think there has been this swell of people excluded from the Central Banks parameters because of 3k euro. This is just a little giveaway that looks like an issue is being partially addressed, and there is no better way to get voters onside then handing out money.

October is going to be a monster giveaway budget. From the get go, so much so it was wreckless. Brexit has provided a little opportunity to backtrack. Sure the very day after ministers were getting the excuse in early.

So FTB's are going to get a little tax refund. Everyone else is also going to get a good few bob back into the pocket. So again the swell won't be from this grant, the swell is being caused by supply not being dealt with.

How the **** the government has not incentivised builders is getting beyond ridiculous. We dropped the VAT for restaurants and tourism and it was a smash hit. It doesn't take a bloody genius to work out they need to drop the tax's for builders short term, take the financial hit, and get houses built and people homed. Probably make up the bloody loss in tax from DIRT and STAMP anyway.

TheDoc

The_Conductor wrote: »

Not at all.
People bought the argument that their homes were a stepping stone- and they should buy whatever they could now- they could rely on flipping it down the road and trading up to a more appropriate dwelling.........

I'm saying we were suckers for believing the politicians- and that I genuinely feel sorry for those who are trapped in this mess.

Sorry about my use of the phrase 'suckers'- I meant it in the older rather than the newer sense of the word...........

In fairness that wasn't as much politicians, as people putting people like Eddie Hobbs on a pedestal, who to anyone with half a brain was an absolute fraud and sham from the get go.

Celtic Tiger was easily one of the worst things to happen to Irish society. Everyone got a few more quid into the pocket and hadn't an absolute breeze what to do with it and how to manage it. So large swathes of people followed and listened to absolute charlatans.

mydarkstar

Walter H Price wrote: »

its pretty obvious why there is no incentive for the govenment to help these people, as in they already have a private house. The focus here seems to be to free up space in the rental market to bring prices down again. any policy should be focused mainly in Dublin becasue thats where the biggest issue is.

The hope is if you incentives first time buys , they will buy and vacate their rental property increasing supply and slightly lowering demand this should then see prices begin to drop back and the knock on could be eventually getting a few families out of hostels over time.

I understand your point about freeing up rental properties by having people become 1st time buyers. The catch for me in this is that I own a 1-bed apartment and have hoped for many years to trade-up, say to a 2-bed house. The 1-bed apartments around our way are very popular for rentals, we have had several neighbours who have rented here continuously for several years.

Balmed Out

If you fail the criteria would you choose a smaller home to meet it? I can't imagine too many saying we will make do with a two bedroomed instead of three etc to avail of the grant.


I would think any grant will just push property prices up, you could buy now without that increase and perhaps avail of the grant. I just bought with the closing date handily enough being yesterday but if I was just sale agreed now I would still be pushing ahead.

There may also be plenty of people with a wait and see approach so there could be leas competition up until budget day.

I received this back from Coveney's Private Secretary earlier today:

Dear Mr Fantastic

In the context of the first-time buyer’s grant announced in the Action Plan for Housing and Homelessness, it is important to remember that these particular measures are for the Department of Finance:

•Details will be revealed by the Minister for Finance in the Budget next October 2016
•It is envisaged that the scheme will apply to affordable new family homes
•It will be backdated to 19th July 2016.

Yours sincerely,

El_Dangeroso

Ah so only new homes then?

Bailout for the developers by the backdoor. Excellent.

Also, loving the way they are not publicising that fact so that people can think any house will net them a bonus.

Bob24

More on this here:
http://www.irishtimes.com/news/politics/coveney-pledges-new-homes-in-dublin-for-about-260-000-1.2728445

Coveny is saying part of the objectives of the plan are to increase supply and deliver new houses in Dublin in the 250000-260000 bracket.

Sounds great in theory, but the problem I have is that he is not explaining at all how he os planning to do that in practice.

dearg lady

TheDoc wrote: »

Your spot on. I'm similar to you. I'm currently on my highest salary I've ever earned, my career just went strength to strength as did my salary all through the recession, and yet I'm worse of then ever. Granted it's multi faceted, forking out €1250 a month for two years didn't help.

Genuinelly just going to happily take whatever comes my way. Cause I've seen now and realise now how our country works. Not that I didn't know already, but having paid my water bills seeing it as such a blatantly obvious thing to do, to see so many dribblers and tinfoil hat warriors get away scott free, has just totally changed my entire outlook on this country. Then the GE happened and I was very much just "**** this noise"

Few pages have mentioned 3k as the potential we are talking about here. To be honest, that is literally nothing to help the situation at all. So its really not even worth getting excited about, or getting worked up over.

I thought it may provide some weight against the paramters. So for example I've paid X tax in 5 years, so weight that against the mortage cap, or I don't know, something. 3k for me is basically my Net bonus, of which I get twice a year *shrug*

What's obliterating me is the cap on x3 salary. I'm the single income in the house, with my GF staying at home, raising our daughter, and another bundle of joy to arrive in Sept. It freaks me how our state just completely disregards stay at home men and woman, as if they arn't doing anything. My GF does the most important work in our household and I'm blessed to have her being a wonderful mother raising an amazing daughter.

So I've the wonderful situation of looking at home ownership, where I'd be looking for a 3bed house minimum, and I'm so nowhere near the marker in terms of the salary cap. To qualify I'd be needing to earn in excess of €85k a year, bit much at my age to be fair with my career mostly in front of me.

So we carry on, locked into the rental market with no real regulation, no certainty and just about any diasater lingering around the corner.

I got so dismayed start of this year, I basically just blew my savings. Watched my family basically scraping by month by month so we could chuck a few bob here and there into savings. Got pretty sick of two years just providing the bare minimum for my GF and daughter, who like I'm sure anyone else, wants to provide the best for their family. So just said **** it, gave GF half my savings, and I blew mine on **** that made me happy.

Not having a go here but I have to wonder why you haven't more saved if your career went from strength to strength during the recession. And to just blow it all? Insanity, I wouldn't be surprised that a bank wouldn't lend to you.

The point re your gf, I don't think any bank would doubt how hard she works, but unfortunately it aint paid work! As a single applicant I do feel your pain.

Villa05

The_Conductor wrote:

My understanding is that there is nothing set in stone- there are a number of options which have been outlined- and upper management have yet to make a decision on which option they are going with. Their initial proposal has already been shot down by Revenue- and they were told to come up with a new proposal and resubmit for evaluation/clearance.

Was being debated on Vincent brown Tuesday night and the FG rep on the panel would not address the following points

Will lead to house building in the wrong areas
Is a blanket benefit and not focused on areas with a chronic shortage of housing
Will only drive up prices and is a help to sell scheme rather than help to buy

His only reply to all these points was l. We must help FTBS. .........

Idbatterim

It seems to me it's the people making decisions. Who don't have a bloody clue. Let's get real here, forget about outside Dublin. Dublin is the problem child! You can dismiss their nonsense out of hand until they allow higher densities and put in some form of decent public transport System...

I read earlier FF said they will pull plug on government support if FG don't sort out the issue. I'm delighted their policies are moronic. Scrapping usc, joke infrastructure spend and this rebuildireland document isn't worth the paper it's written on!!!

_Kaiser_

dearg lady wrote: »

Not having a go here but I have to wonder why you haven't more saved if your career went from strength to strength during the recession. And to just blow it all? Insanity, I wouldn't be surprised that a bank wouldn't lend to you.

The point re your gf, I don't think any bank would doubt how hard she works, but unfortunately it aint paid work! As a single applicant I do feel your pain.

I'm sure he'll reply as well but speaking for myself... while yes my career and salary level has increased significantly over the last few years, so too have:

- my taxes (USC, and the raft of indirect charges that were introduced)
- the loss of most of the few tax credits and rebates I was entitled to
- the cost of living in Dublin (which I eventually had enough of just to be close to the office and so I moved outside the city last year and commute which still - crazily enough!! - works out cheaper!)
- the cost of helping to raise a child

Plus given that the whole market is weighted against single applicants, the deposit requirements (tough to come up with when you're paying crazy rents as well as everything else), and the frankly ridiculous prices of property in Dublin being out of reach anyway unless you're earning close to 100k I wouldn't blame him at all for saying f*ck it, and enjoying the money rather than saving it for something that will possibly/probably? never come.

In my case it's like this....

- I'm 40 now so rapidly approaching/already past the "too old" point to qualify for something I'd want to live in anyway. Being currently single doesn't help, unless I want to try for a shoebox 1-bed apartment with paper thin walls somewhere
- As I work in IT that means I'm effectively tied to Dublin for employment prospects. Oh sure, there's jobs in the likes of Cork too but not as many and the property situation there is going the same way as Dublin
- Savings? Those got wiped out when I was made redundant for a year in the recession. Everything now goes on bills, commuting or the little fella
- Gifts or inheritance from parents? Not with both deceased but that aside, my late mother had enough problems and struggles of her own. Not everyone can fall back on the Parent ATM

The bottom line as I see it is that I probably SHOULD have taken all the cheap cash and mortgage in the Tiger years as trying to be responsible and thinking ahead has only landed me with the tab for those who weren't, vested interests, and reckless financial institutions - and seeing as we're well on the road to Property Bubble and Collapse 2, it won't be too long before the Government of the day looks to dip into my pocket again for the next generation of wannabe property magnates.

In the meantime I'll continue to be squeezed in the farcical rental market which is seen as something you "endure" on the road to property ownership, or the option for "failures" and this is reflected in the manner by which all sides - tenants, landlords and Government - treat it. It's amazing how backwards and short-sighted this country really is at times, but that's what happens when you have an entire nation obsessed with owning a house. I can only think it must be some sort of colonial hangover because it seems to me that nothing has been learned from the last property and economic collapse , and "everyone" is already too busy rushing towards the next one.

dearg lady

I fully appreciate all those points, but everyone (even those who took out Celtic Tiger loans!) has had to deal with those issues. The only one unique to renters is the current cost of rents. However rents were at historically low levels up until around 2 years ago, so swings and roundabouts on that one.

I just find it hard to understand how someone who never took out a mortgage, whose career went from strength to strength doesn't have significant savings.

As a one income family you will simply have to buy at the cheaper end of the market, that's a given.

Just to give an example, let's assume a salary of 50,000, by 3.5 times is 175,000. This along with a deposit of 25,0000 gives total purchasing power of 200,000. There are 2 beds and even some 3 beds available within this price range. Certainly a year or two ago there would have been a lot more available at this level.

yqtwqxqm

Looks like taxes for anyone over €70k are going to go through the roof now again according to what Noonan is up to.
Even less disposable income for working harder to save money for a mortgage.

Better off just giving up work and going for the social housing at this rate.