Q. I’m confused about the new affordable mortgages being proposed. Do I still need a deposit and do I have to buy a local authority home?
A. I think you have the wrong end of the stick, but it is confusing. The new loan scheme to provide mortgages to those who cannot get them from banks, was recently announced by Housing Minister Eoghan Murphy with rollout from this month for up to 1,000 mortgages.
Although the loans will be made available by local authorities, they have nothing to do with council properties – you can buy (or build) any house (subject to size for builds). The loans will be at low interest rates compared to the retail banks (fixed at 2 – 2.25pc over 25 or 30 years). The key criteria to meet are tough, however. You must have been already refused a mortgage by at least two banks. It is reserved for borrowers who earn no more than €50,000 (€75,000 for couples), but you can borrow up to 90pc of the property’s value, so yes, you need a deposit.
You must be a first time buyer, in continuous employment for at least two years (or have two years of accounts if self-employed), and it has to be your principal residence. There are financial checks similar to those a bank would employ. If you jump those hurdles, the maximum market value of the property cannot exceed €320,000 in Dublin, Cork, Galway, Limerick, Louth, Meath, Kildare or Wicklow, and €250,000 anywhere else.
The website, despite its an unwieldy name (rebuildingirelandhomeloan.ie) gives good details on the scheme. Loans can be applied for via your local authority if you meet the requirements. I received a letter under my apartment door from my landlord (which some of my neighbours appear to have received also), informing us that a new charge is being applied for parking and refuse collection. For this, he claims, he is installing new communal bins for separating waste and painting parking spaces with apartment numbers on them which he says is enhancing the property. None of us asked for this, but it’s going to cost an extra €120 a month which I can’t afford. He says he is within the law, but is it a sneaky rent increase and can I stop it? I’m in a Rent Pressure Zone.
It certainly looks like it. I’m hearing quite a lot of inventive excuses to push up rent by pretending it’s not really rent at all, but of course, to tenants like yourself, it’s still a hike in the monthly outgoing to a landlord, so it hardly matters what it’s called. It seems from what you are saying that the landlord is attempting to justify the increase on the refurbishment clause which allows higher than 4pc rent increases if there is a ‘substantial change’ to the property’s value.
This normally is taken to mean additional bedrooms or living space, and a painted car park space and a few bins would certainly not qualify. Neither does re-painting, or installing new white goods, for instance.
By law currently, your landlord is required to provide access to adequate refuse storage facilities in any event, so this is hardly an improvement either.
A spokesperson from Threshold told me, “We are seeing this issue crop up particularly where leases are being renewed. “It is abnormal once a lease has been signed to introduce additional charges but it’s difficult to comment in the absence of details on the lease.
“The landlord’s actions could be seen as an attempt to circumnavigate the legislation which limits rent reviews in a RPZ to 4pc per annum and we would advise you refer a dispute to the RTB. Alternatively, contact our team of dedicated housing advisors on our freephone helpline 1800 454 454 which operates from 9am-9pm.”
The Ryan ReviewI was in a taxi the other day, and as occasionally happens, was asked by the driver what I thought the property market was like these days, and whether it was worth investing in. He already had two apartments, and was considering taking a punt on a third, bemoaning the price increases and regulations, but justifying the rental income and stock shortage. He reckoned it was now or never, but confessed to be also fascinated about cryptocurrencies – he knew someone who had cashed in Bitcoin at the ‘right time’. What did I think?
In late 1928 Joe Kennedy (Wall St mogul and father of John F) stopped on his way to work to have his shoes shined on a street stoop. The boy wielding the cloth and brushes started discussing stocks with him, offering him tips on what to put his money in. There and then Kennedy decided to sell up everything in his stock portfolio, reasoning “You know it’s time to sell when shoeshine boys give you stock tips; the bull market is over.” He was one of the few who avoided the Great Depression when the stock market crashed the following year. I don’t know where the property market is going, any more than I know about cryptocurrencies, and anyone who tells you they do, doesn’t either. What I do know, is that we have inexorably rising prices, both capital and rent, and an unsustainable market. We also now, have cheap, easy credit. And I also know that every bubble needs a shoeshine boy.