ewd3 I read through that whole feicing thread thinking there’d be some reference to affordable housing in it, there’s 10 minutes of my life I’ll never get back! I realise now it was the title you were referring me to, thanks.
BB thanks for your post, very interesting and appreciate the time taken to kill my dream, ah no, I know most of what you say makes sense amthough 80k for 2-bed beside luas would be amazing! I live up the road from Wyckham so am well aware of the empties etc will be a long and well thought out decision I promise you, county council are so slow progressing these things it will be months before anything needs signing so will research thoroughly before deciding. FYI 70 apartments for affordable housing out of 520 total, I’m sure that was not the intention when initially planned. Will be interested to see if the gym marketed at initial launch is till going to be included!
It was indeed
However the whole thread is entirely relevant.
If prices fall by the levels some are talking about you will have no need to sign up to such a scheme.
If they don’t then perhaps it would be an idea.
Read the material and make up your own mind given that you are talking about spending hundreds of thousands of pounds I think 10 minutes is not much to get a good indication of the possibilities of further reductions.
I realise that there is nothing specific to Affordable housing but Affordable housing is a misnomer in my opinion at the moment.
The bottom line here is this.
Over the next 6 years you will save more by renting that buying, even if you buy one of these “affordable” places.
The maximum you’ll get back by selling in 5-6 years is 350K. There is ZERO chance that these places are going to be changing hands for 600K+++. Even then you’ll be getting 70% of a profit that’s going to be way to small to cover the costs you’ve taken on (interest, management fees, loss of FTB status).
If you were happy to stay there for 10 years, then maybe it might make sense. If you know that your goal is to buy your ultimate home in 5-6 years, then rent, save and do that, and forget about “affordable housing”.
Do the maths, you’ll find the answer yourself. Compare rent with the interest and maintenance fees you’ll be paying and the position you’ll be in in 5-6 years. There’s no question what the best course is.
I had a look at asking prices in Dubdrum and I’m baffled, it’s like they’re still living in 2006 over there. You’ll need a time machine just to get to and from work.
-Rd
Not to sure about the growth aspect, think it woks like this, to but at 350 k with a 36% discount of you sell within ten years for 500 say to have to pay 36% of the sale price back not the growth, your cut is 320, double check that.
More importantly get the property valued in today’s market don’t accept 550 as the value get it checked that way if it comes back lower the discount is lower and so is your risk.
Banks are rejecting mortgages because values have dropped I’ve heard that some affordable home buyers have successfully queried the value and discount.
Only a few banks/building societies will give an affordable housing mortgage (Bank of Ireland, EBS, First Active, Haven Mortgages, IIB Homeloans, Ulster Bank)
- I think these are slightly different than the “usual” mortgage…none of the banks with AH mortgages require a 20% deposit afaik. BOS do not do AH mortgage. As it stands if the banks etc… were to introduce a 20% deposit for AH housing then the scheme would collapse.
Still a joke though!
Just a clarification on this issue. Only 4 banks do affordable housing mortgages and only a 2/3% deposit is required. I believe this is probably due to the clawback % being seen as a buffer to negative equity. Of course if mortgage conditions really disimprove then this will surely change.
Edit: Beaten to the punch by he_shoots_he_scores!.
The Affordable Housing scheme is, and always has been, a complete swizz. It should be scrapped forthwith.
Considering the threshold includes just about everyone, it’s basically a lottery where you get 20%-35% off your gaff compared to your neighbour who’s number didn’t come up and who gets to pay full whack for his gaff while subsidising yours.
[/rant]
I’d go for it if you think prices won’t come down to near that level in the next 5/6 years. Try and get a revaluation done that might get a more realistic view of the asking price for non-artificially-government-propped-up buyers. Check out the rents for the equivalent, and ask yourself have you the discipline to properly save for a deposit if that’s your chosen route.
Renting = more flexibility but less security, no loss of FTBer status, or Mortgage Interest Relief (both of which should be scrapped.)
Buying = more stable, potential downside as well as potential upside.
I’m aware that this comes off as very anti-Affordable Housing, which I am, but it doesn’t mean that I don’t think you shouldn’t use the scheme if you feel it is to your advantage. (Sure the SSIA scheme was a ploy to buy the last election for FF, still didn’t stop me from opening one.)
Hi mims.
I’m sorry for accusing you of acting unethically. I withdraw the comment. I was being a bit egotistic and trying to be hard on the ‘noob’ (mild trolling if you will, attempting to get the debate rolling, adding pure ethanol to the punch bowl, etc.).
You will understand that when I hear the words ‘affordable housing’ steam starts coming out of my ears.
Again the AH scheme is NOT being subsidised by taxpayers. AH owners pay the council (plus a few grand extra) what the council paid for the house. There is no subsidising.
There is if the council is overpaying.
Anyone ever heard of a public body underpaying with the taxpayer’s money 
Eh, and who pays for all the advertising, web design (complete with Polish, Chinese, Irish and Lithuanian translations and photos of young happy couples choosing paint), PR and offices? Who funds the “Affordable Homes Partnership/Quango”? Who pays for the social housing?
True this would be paid by the taxpayers but like I said they do add on a few grand (up to 10K in some cases I’ve seen) to each house they sell.
This is completely funded by the taxpayer. Although social and affordable housing are usually always uttered in the same sentence there is a big difference between the two of them.
If housing prices continue to fall at their currrent pace for the next 2 to 4 years then there will be no need for affordable housing. The need for social will probably always remain.
The council buys the house at cost price which is got from figures provided to the revenue. An odd (developer friendly) quirk in the tax laws actually means the developer tries to show the minimum cost possible to the revenue and thus the council gets the house for the best possible price.
A caveat would be if the houses were selling for less then it cost to build them. This situation hasn’t arisen yet but probably will in the near future and it will be then when the council is overpaying based on current rules. This would be a bailout to developers.
Mims for my 2 cents I think you have to ask yourself 2 questions:
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Do you believe that house prices will come down to the price you are paying for under AH in the next few years.
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Even if pices do come down but are still above the price you pay under AH is it worth popping your FTB status. i.e. if you save when prices are falling you can then by a nice second hand house with no stamp duty implications.
Most people here will tell you to rent and wait for prices to fall and then buy yourself. As an AH buyer in 2006, if I saw the conditions so obvious now, I’d probably have continued to rent as opposed to have bought. Though I do pay less on the monthly mortgage then I would if renting and the location is perfect for me.
Thanks so much for all the debate and opinions, just showed it to the mother who thought it was extremely thought provoking and informative! I will let you guys be my head and do my utmost to ignore my heart!
AH guy, many thanks for defending affordable housing, good to know I’m not alone in here!
Cellopoint, thanks for retracting the unethical jibe, I don’t take offence to your problem with affordable housing, the anger and passion behind you posts only makes me listen and hear what you’re saying all the more 
My original post never mentioned the taxpayer, I said the AH was being subsidised by your neighbour(s).
As I understand it, each development has to hand over 20% of gaffs to the AH. So a developer only makes money on 80% of the houses he builds, so to achieve the same profit that he would have made without the AH scheme he needs to charge a premium on these 80% of remaining gaffs. This is the subsidising that I spoke of in my post.
In the bizarro world of socialist economics maybe. In the real world there is an effective tax being paid by everyone who isn’t on the inside of this AH scam.
Being contrarian, if she’s getting a 30% discount on market price isn’t the only risk that property prices fall 30%. Otherwise this is a no-brainer? If it was me I wouldn’t buy in this particular development but I’d jump if I won the AH lottery somewhere else.
And as geckko says, every other purchaser in the development ends up subsidising the AH people, there are no free lunches. Because it’s a cleverly hidden stealth tax most people don’t realise this.