The bro and his gf are buying an apartment in Priorsgate in Tallaght from the Council on affordable housing. The council valued the apartment at €345,000. It’s a two-bedroom. They agreed to sell it to my bro for €281,350. However my bro has just been told by the bank that they have valued the property and it is only worth €281,000 on the open market. Has has spoken to the council and they are unwilling to revalue the property. Is anybody else in the same boat? How crazy is it that so-called affordable housing is more expensive than the open market price.
Well, your bro had agreed to buy it at 281,000 which was deemed as the affordable price.
This is the ‘affordable’ housing scheme, not the ‘discount’ housing scheme. The purpose of the scheme is to provide houses which are affordable. Whichever way the open market price of the house goes isn’t really relevant. If the AH price equals the open market price then the scheme is defunct and does not really serve any purpose.
That said, your bro would be better off buying at the open market price because then he doesn’t have the restrictions of the AH scheme…
And seeing as they are in the Irish Times property supplement today , relaunched by Ken at less than €281k ( one third off) , you may take it that the NEXT open market valuation by the bank will be less than Kens valuation which is itself lower than the last valuation .
As Ken has ‘valued’ the 2Beds for sale at €275k , on mature reflection and open to offer , then it is probably realistic that their OPEN market value is in the range €200k to €240k right now . Kens staff can be very snooty, if they give you any jip then remind them that if they sell nothing they earn nothing, way it is .
The AHI price should be a 20% discount off that open market price .
Make a first offer at €200k less 20% (which is €160k) and insist on Section 23 as well. Be prepared to go to €196k ( €240k - 20%) but not a penny more.
Anyone who took the AHI price first time round is well underwater. Ken will give them sympathy and buns …but no discount.
No, the scheme is supposed to give a reduction on the open market value. Don’t forget that if you sell your home before 20 years you have to pay a claw-back fee to the council. It wouldn’t be fair to expect someone to pay open market value if the council still owns a certain percentage of the house?
So if you pay open market value they own 0% of your house and you can do what you like with.
AH is NOT a discount scheme, the clue is in the name, it’s a scheme to help those who cannot AFFORD a house to buy one with council help. If you can afford open market value, you have no business being in the scheme.
That’s why buyers should have to contribute the maximum they can afford to.
But the council are saying the market value is €340K when it is really €270K. They are over valueing the house by 25%
So if somebody can only AFFORD €250K, why the hell are the council selling it for €271K when the market value is €270K (and likely to drop more)? And why are the council saying the market rate is €340K when it clearly isn’t?
Hold on a second and forgive my suspicous mind jumping to conclusions …
but is there a danger here that the council have locked themselves in to sales at purchase prices which may have been a discount at go to market but are now way above the actual value???
That would be incredible. Are any of these schemes locked in to paying a developer a specific amount?
That… would be the ultimate weekend in bailout city…
