Tuesday, 21 October 2008

Daft Property Ireland - 'Affordable Housing' More Expensive Than 'Unaffordable Housing'...

'Affordable housing' now more expensive than market...

WITH THE downturn in property prices, homes in north and south Dublin and Meath are on the market for the same or lower prices than similar homes under the affordable housing scheme.

Buyers can save €10,000 on €245,000 two-bedroom apartments in Phibblestown Wood, Ongar, Dublin 15, and €5,000 on €205,000 three-bedroom homes at Parnell Drive and Parnell Green, Ladyswell, Mulhuddart, by purchasing on the open market instead of through Fingal County Council.

Three-bedroom apartments at Bailis Village, Navan, Co Meath, available through the county council's affordable housing scheme for €233,000, are advertised at the same price on the open market, as are two-bedroom properties at Eaton Square, Rathcoole, in south Dublin, available through the county council for €220,000. By purchasing on the open market homeowners avoid the "clawback" aspect of affordable housing schemes. Clawback means that if a home is sold within 20 years of purchase, the local authority must be paid a percentage of the price.

Affordable homes are built under Part V of the Planning and Development Act 2000. Under the Act, developers provide land, money or 20 per cent of their residential development to the local authority for social and affordable housing. The local authority must pay the developer a fair price. The price is based on land value, construction costs and a reasonable profit for the developer, usually between 7.5 per cent and 15 per cent. This is the price which is then passed on to the homeowner.

Agreements on Part V between developers and local authorities may be reached two or three years in advance of the units being delivered.

In the past, because of the rapid growth in property prices, this has worked to the advantage of local authorities. However, some authorities have found themselves tied into legally-binding agreements under which they will pay more than the going rate for property. A spokeswoman for Fingal council said there is still interest in buying affordable homes in Fingal. They had 732 approved applicants on their affordable housing list. Some 79 per cent of applicants are single and 55 per cent are under 30 years of age. "Prices for units in Parnell are still quite favourable even in a declining market. Prices for Phibblestown Wood, which were provided to Fingal County Council through the Affordable Homes Partnership, are somewhat higher, although we have a very small number of those units for sale," the spokeswoman said.

A spokeswoman for South Dublin council said they were very conscious of the housing market, which was changing on a daily basis. The Department of the Environment said it would be open to the local authority to seek to renegotiate the price agreed with a developer where there had been significant market changes.

Report by FIONA GARTLAND - Irish Times

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