How affordable housing can help first-timers

First-time Buyers: Local authorities are helping a wide range of people to get a foothold in the property market through affordable housing schemes. Kate McMorrow reports

First-time buyers who despair at the high cost of starter homes should get onto an affordable housing list without delay. This way, they will acquire a foothold on the property ladder at a fraction of the market price.

To qualify, you must be a first-time buyer in full-time employment for one year, with pre-tax earnings of less than €32,000 in the last tax year. Couples must earn a combined pre-tax salary of less than €80,000.

Applicants have to prove they have the wherewithal to repay a mortgage. Gardai, teachers and civil servants feature prominently among the successful candidates so far.

Criteria for choosing between applicants varies, with those in need of housing and people from the locality receiving priority. As Dublin City Council receives hundreds of applications for their city centre schemes, a lottery system is in operation.

However, in local authority areas where property is not overly expensive, applicants can pick and choose. In all cases, applicants may accept or reject properties offered until the right location comes along.

Something to note is the difference between affordable housing schemes where councils build on their own land, and affordable housing in private developments coming available under Part V legislation. In the latter case, affordable applicants will acquire a house or apartment for up to €50,000 less than their neighbours who paid the full price.

Dublin City Council will soon be advertising for applicants for the Part V schemes in their area. Those already on the register for affordable housing must apply separately for the Part V scheme.

Lucky applicants could find themselves with a smart apartment in the docklands area, where the huge Spencer Dock and the Gasworks projects are gathering steam.

Developments will be coming available all over the city later this year and throughout 2005. Several private housing schemes, including a number of small infill developments, are currently at agreement stage, according to housing officials.

Look out for the Cork Street area, where the new Digital Hub is to be based and the area around Heuston Station, which will experience regeneration in the coming years.

Negotiation with developers at pre-planning stage has become the norm since an Amendment of the Part V act was introduced in 2003. This was in answer to builders' objections at having to provide affordable housing in upmarket locations with high land values such as Ballsbridge. These locations tend to be too expensive for first-time buyers, even at reduced prices. In some cases, a developer can suggest off-site options and still comply with their obligations under the Part V legislation.

Developers can and do offer a cash contribution to the local housing authority in lieu of affordable housing on an expensive site. These cash reserves are intended to be ring-fenced for the provision of affordable/social housing or to subsidise housing on other high-priced schemes.

One of the front-runners in the provision of affordable housing, Fingal County Council, has housed hundreds of first-time buyers under the scheme so far. Fingal has a good supply of affordable housing coming up this year in Swords, Balbriggan, Rush and the general Dublin 15 area.

As in other local authority areas, applicants are placed on a waiting list for their preferred location and notified when a property becomes available. You can wait up to a year for popular locations in this area.

Outside the city, Meath County Council is another excellent target area for affordable housing candidates. In the pipeline are two and three-bedroom houses in Donore, Bettystown, Kentstown, Ratoath, Longwood, Kells, Ballivor and Enfield. Affordable schemes in Trim and Navan are already up and running. Around €45,000 is the average amount an applicant can expect to save on acquiring an affordable property.

There is a clawback ruling, whereby anyone selling on within 20 years must repay a proportion of the discount. This is putting applicants off the scheme according to local authority officials. However, given the almost inevitable rise in value over just a few years, the saving should still be worthwhile.

First-time buyers need not confine themselves to any one local authority when applying for affordable housing. It should be borne in mind, though, that preference is given to those living in the area and in need of housing. Given the amount of affordable housing stock due to come on stream this year and next, it makes sense to register as soon as possible.