DUBLIN: What is an ‘affordable home’? It is often different for each person. The Affordable Housing Scheme is one of the Government’s main initiatives to address the housing problem for first-time buyers.
The Government announced in May of this year that the Affordable Scheme will be implemented in the housing sector. The scheme is to help families who cannot secure the entire mortgage to buy their first home. Opposition parties have alleged that the scheme will lead to inflation.
What does the Government mean by an affordable scheme?
If you are purchasing a home in Ireland for the first time, you can request the Government to pay 20% of the total price, and you will receive the remaining 80% as a mortgage.
You do not have to pay interest for the first five years on the 20% that the government pays for your new home! Thereafter nominal interest will be charged.
You can buy the 20% share that the Government pays for you (equivalent to the current deposit) later at any time if required.
This means you can repay the interest-free assistance (share amount) provided by the Government for the first five years after purchasing the house and, if needed, take full ownership of the house. And if you are not able to pay, you will have to pay interest along with the mortgage on the shares provided by the government.
Government’s affordable price is as follows:
Homes valued up to €450,000 can be purchased through the Affordable Housing Scheme in Dublin City and Dún Laoghaire. Couples with a joint income of up to €90,000 can buy a home for €450,000 under the current scheme.
The price limit is set by the Government based on the local authority area, and there are seven bands. An affordable home is priced at €400,000 in South Dublin, Fingal, Cork, Galway and Wicklow.
Prices are capped at €350,000 in Cork, Limerick, Kildare, and Meath, €300,000 in Clare, Westmeath, and Wexford, and €275,000 in Carlow, Louth, and Offaly.
There will be a €250,000 cap in Kerry, Kilkenny, Laois, Waterford, and Roscommon, and a €225,000 in Cavan, Donegal, Leitrim, Longford, Mayo, Monaghan, Sligo, and Tipperary.
Buying a home under this scheme is a lucrative deal for middle-class people, including including those in the nursing field who have been unable to purchase a home in Ireland even after residing here for years.
The Government’s allocation for the scheme is relatively small. However, €620 million has been set aside for this purpose in the 2021 budget. The Government intends to assist at least 2,000 people by 2021, and there is also the possibility of allowing more funding.
Affordable housing for the public
A recent Ireland Thinks/The Good Information Poll found that the public also disagrees with the Government scheme’s assessment of ‘affordable’.
According to the survey, 50% of people say a house priced between €200,000 and €299,000 is affordable, while 13% believe it is between €300,000 and €400,000 and 29% believe it is between €100,000 and €199,000.
People living in Dublin, those earning over €60k per annum and those owning their own home are said to find 250,000 affordable.
Only 3% believe that house costs more than €600,000 is affordable. At the same time, 2% believe a home priced between €450,000 and €549,000 is affordable, while 4% believe a €75,000 home is.
It should be noted that the majority of the respondents here have considered the cost of building a house in order to reach such an understanding. Others rate it differently from the urban and rural levels. Some people determined the affordability of a home based on their sources of income.
Opposition parties with criticisms
The Government’s price list has been criticised by opposition parties. “This will increase house prices rather than represent a step change in our approach to housing, making it genuinely affordable for ordinary people,” said Labour’s Rebecca Moynihan.
“The Government is living on another planet if it thinks €450,000 for a home in Dublin – and €400,000 in Cork and Galway – is affordable. It simply is not,” the Social Democrats’ Cian O’Callaghan said.
Real estate agents have already begun to raise their prices in view of the implementation of this scheme, which is equivalent to a mortgage. Figures suggest prices could rise by up to 12 per cent.
The Government is waiting for the project to be officially announced. Minister for Housing Darragh O’Brien has said that the scheme will be implemented as soon as the Central Bank approves it. Tánaiste Leo Varadkar said in the Dáil yesterday that he has asked the Central Bank to make an immediate decision in this regard.
Kindly click the link below to join WhatsApp group chat to get important news and breaking news from Irish Samachar