Affordable home partnership buys 500 units

The Government's Affordable Homes Partnership has bought some 500 new homes on the open market in the greater Dublin area in recent weeks, spending a minimum of €120 million, The Irish Timeshas learned.

The new homes were acquired in bulk from builders mainly in the run-up to Christmas and the New Year, when substantial discounts were sought by the Government's Affordable Homes Partnership. In some cases entire developments have been bought out.

The purchase was confirmed yesterday by Minister for the Environment Dick Roche, who said the "good news was further evidence of the Government's commitment to affordable housing".

Details of how much money was spent were not forthcoming. However, taking average house prices and a discount of 30 per cent, the figures indicate the Government has spent well over €120 million.

The Government was able to secure such a substantial discount because it was able to offer bulk deals and certainty of sale to speculative builders, who might otherwise face a potential property slow-down before their developments are complete.

The money is to be recouped by selling the new homes at cost to those on the affordable housing list.

Affordable housing lists are made up of employed people with good credit history whose income is too small to fund a mortgage in the current market.

Money from sales of the new homes is to be reinvested by the Affordable Homes Partnership to fund similar deals with the private sector over the coming months.

This scheme differs from those used by the Affordable Homes Partnership in the past, which have included land swaps and Part V of the Planning and Development Act 2000 which requires that up to 20 per cent of new housing developments should be handed over to local authorities by builders at cost price.

The purchase of the 500 homes was confirmed by Mr Roche, who is due to launch the scheme in the coming week. Full details of the new homes, including the number located in each local authority area, will be announced at that stage.

Based on a conservative estimate of the average market value for a new home of €350,000, a 30 per cent discount would see the State acquiring the 500 new homes for €245,000 each on average. At these prices the State would have spent €122.5million.

All of the homes acquired are in the greater Dublin area, but the Government is also considering schemes in a number of regional centres.

The initiative comes just one week after the Government said it would spend €4 billion on affordable housing over the next seven years as part of the National Development Plan. A further €17 billion is to be spend on social housing.

The initiative also follows the announcement that more than 1,100 affordable homes are to be provided in the Lucan and Killiney areas of Co Dublin under a separate scheme proposed by the Affordable Homes Partnership.

Estimated prices for affordable homes in the Lucan scheme vary from €260,000 for a two-bedroom house or apartment, to €315,000 for a three-bedroom property.

It is believed that the market values for the two-bedroom properties is €380,000, and €500,000 for the three-bedroom homes.

The estimated price for a two-bedroom apartment in the Killiney scheme is €300,000, compared with a market price of €550,000-€600,000.

The figures represent discounts of between 31 and almost 50 per cent.