renting out affordable housing

pAnTs said:

so how does the buying them out thing work, my clawback is like 45% or something, what would that mean?

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what is the price of your property?

the largest the discount you get at the start the harder it will be to buy them out. While its great to buy your apt with such a good discount,. you have to think of the end result of buying them out.

In short: the above is, you pay 45% of the amount the property is valued at to the council, plus the loan you have taken out with them. so add the % onto ur original loan and that is what you have to pay them back with. I only had a 12% discount and had to still pay 38k back on top of what i borrowed.

ye mine would be more along the lines of 430,000!!!!!!!!!!!!! hmm that makes sense why I was confused at everyones suggestion of just buying them out. I wouldn't go away if it meant risking my property and I wouldn't lie about it so if they don't give me some leeway I'll have to rethink my plans. I think they should allow people some movement though. I mean fair enough not letting people take advantage of the AH scheme but private purchasers don't have to guarantee that no unexpected situations will arise when they sign their mortgage, seems unrealistic to expect that

Private purchasers pay 100% of the market value. You paid 55% of the market value and technically the Council still owns the other 45% until the appropriate time period has elapsed. Why do you think the council shouldn't have an interest?

I personally think the initial valuations of these AH properties are grossely inflated and do rip off the purchaser and/or the tax payer, but once you signed the contract that's your problem.

no howitzer technically speaking the house is not the councils at all, the house is al mine and I pay them a clawback if I sell before 20 years. I was thinking about this one though, Im single now as most of the AH purchasers are (if the had a 2 salary income they could probably buy privately) what if I meet a partner who also owns an affordable house? what do we do then?

Sell one and pay the clawback maybe? What do other couples do when they have 2 properties? Invariably they sell one within 12 months of it no longer being their PPR in order to avoid paying CGT, or rather the tax system gives them a 12 month period during which they would reasonably be expected to divest themselves of the 2nd property.

Believe it or not the notion that you should never sell your starter property, that you should always hold onto it and rent it out, is a very recent phenomenon, fuelled by reasoning that is most likely omerta to discuss on this site.

I just couldn't imagine ever selling this place as I would like to return here when downsizing if I had to move to accommodate a bigger family. I love everything about this place and as I mentioned before it's my home.

cmb. said:

affordable housing does allow for renting out in certain circumstances - i.e living abroad for a year etc but the fime on the clawback freezws - i.e if your clawback is 20 years and you go travelling for a year but rent the house/apt out the time is calculated on you living in the place for 20 years - if you contact your council they will clarify this - i did ask about this when applying (in case i ever took a career break and wasnted to travel for a year or two ) and this is what i was told

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What council was this with? I am waiting on my place to be built (hopefully around may) which I got through SDCC and now might now have to go to the states for 12 months. It would be great if I could freeze the clawback rather than having to sell it and have to start all over again when I come back.

hi there 2 years down the line and what changes since then!!!!

was there any changes to the renting situation now wit the recession??

pAnTs said:

was there any changes to the renting situation now wit the recession??

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Officially, no. The government's response to questions on the subject has been that if you have trouble paying your mortgage there are supports available, but they won't change the rules.

Unofficially, as long as your mortgage is still being paid and your tenants aren't causing any trouble, DCC at least seems to be turning a blind eye.

Ask the council, I agree there should be some flexibility here. I remember in the UK, it was possible to freeze your mortgage for a year to go travelling, no matter what your age and that was 10 years ago! I don't know how things are now in the UK. In this regard, homes and affordable homes should be treated the same.

ye i think once you have been living there 5 years or so you should be able to rent it out etc to trade up or move due to a change in circumstances.

If there is no claw back issue, i.e. if the apartment/house has dropped below what you paid for it what can the council actually do if you decide to rent it out?

We are in this situation at the minute and the council gave us permission to rent it for 1 year but I don't think we will ever move back to the apartment as we are in the process of saving for a new house.

I don't think the council can actually do anything.

Bobbyg said:

If there is no claw back issue, i.e. if the apartment/house has dropped below what you paid for it what can the council actually do if you decide to rent it out?
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I don't think the council can actually do anything.

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They can, because you're in breach of your contract and under the terms of your contract (assuming it's the same as mine) this entitles them to repossess the property.

Would they? Probably not.

But it is a grey area especially when there is no longer a clawback. The councils really aren't saying what they would do in such cases.

Brooklyn said:

They can, because you're in breach of your contract and under the terms of your contract (assuming it's the same as mine) this entitles them to repossess the property.

Would they? Probably not.

But it is a grey area especially when there is no longer a clawback. The councils really aren't saying what they would do in such cases.

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I don't want this to sound smart because it is a genuine question but how could they repossess a property that is not theirs.

Surely if the bank own the deeds they will have a big say in what happens?

Bobbyg said:

I don't want this to sound smart because it is a genuine question but how could they repossess a property that is not theirs.

Surely if the bank own the deeds they will have a big say in what happens?

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Sorry, I should have said I was referring specifically to cases where the mortgagee is the local authority and not a bank. However the same rule about non-renting applies whoever the mortgagee is. They may have worked out some agreement with the banks who offer affordable housing mortgages to impose a similar condition, I'm not sure. Check your contract with the bank.

In any case, presumably the ordinary legal remedies for breach of contract would apply e.g. damages, specific performance etc. It's clearly not true to say that they "can't do anything". But it would be nice if they would make clear what exactly they intend to do in such cases.

Id say at the moment people renting is the least of their worries. I would say people are no longer buying affordable homes, why would you when they are the same price as homes on the open market. I think the advantage for affordable homes lies in the fact that you do not need a large deposit but the drawback is quite large sooo

I just noticed this:

"Fingal County Council has adopted a policy to allow Affordable home owners to let their Affordable homes on a temporary basis."

[broken link removed]

well well well, I wonder what sparked that turn around?? is it conditional on circumstances due to the present climate I wonder???

I wouldn't sign the Fingal application form.

Fingal have realised that there is nothing that they can do in relation to properties that are being let out unless they provided mortgage for the property. The Fingal form is self serving and only seeks to improve the council's position.

what do you think they could do if they are the mortgage provider? I mean how would that change their position in a court etc? my mortgage is with the council themselves and Im just wondering what the difference is between me and a neighbour who changed mortgage providers?