Council tenants may get 60% discount to buy houses

More than 11,000 council house tenants in Dublin are to be offered the opportunity to buy their homes at discounts of up to 60 per cent of the market value in the coming weeks.

However, Dublin City Council plans to exclude tenants of one-bedroom homes, and 775 people living alone in three- and four-bed houses from the new tenant-purchase scheme because of the housing crisis.

The last tenant-purchase scheme was discontinued in 2012, and many were critical of the Government’s decision to reintroduce the right to buy council houses at a discount given the chronic shortage of social housing.

Simon Brooke, head of policy with housing body Clúid, has described the scheme as "selling off the family silver at a knock-down price".

The new scheme, which took effect from January but is only now becoming operational, offers discounts of up to twice those offered under the last scheme.

Tenants of council houses have been able to buy their homes from individual local authorities since the 1930s, and a national scheme for the sale of council houses was introduced in 1973.

Discount

The most recent scheme, which had been in force since 1995, offered tenants a 3 per cent discount of the value of the house for each year they had been tenants up to a maximum of 10 years.

The new scheme offers discounts based not on the longevity of the tenancy but on the income of the tenant.

Applicants earning more than €30,000 get 40 per cent off the price, those with an income of €20,000-€30,000 pay 50 per cent of the market value, and those with an income of €15,000-€20,000 get a discount of 60 per cent.

Buyers face a “clawback” of some or all of the discount received if they sell on their house before the end of the repayment term.

The city council owns 25,000 flats and houses, but only council house tenants can buy their homes. Tenants in arrears on rent and tenants who have not paid their Irish Water bills are also ineligible.

Win-win

Announcing the scheme last year, Minister for the Environment Alan Kelly said it was a “win-win” for tenants and the council as it “freed up” resources which could be spent on new social housing.

At the full discount a tenant of a three-bed house in Terenure valued at €345,000 could buy it for €138,000.

A similar house in Finglas valued at €180,000 could be bought for €72,000.

Figures from the council show almost 10 per cent of three- and four-bedroom council houses in Dublin city are being occupied by just one tenant. Three-bedroom houses make up by far the largest number of council houses in the city at 7,337, while there are 1,170 four-bedroom council houses.

One-bedroom houses are being excluded because of the high demand for these homes. Of the 22,355 applicants on the city’s housing waiting list, 12,559 are in need of one-bedroom accommodation, 7,330 need two bedrooms, 2,220 need three bedrooms, 212 need four bedrooms and 34 need five bedrooms.

Eligible tenants can choose to buy using their own resources or can apply for a local authority loan. About half of those with existing council mortgages are in arrears and council officials have questioned whether the council should be providing “subprime mortgages”.