Meath latest to cut prices of affordable homes

MEATH COUNTY Council is to cut the price of its affordable homes – to as low as €100,000 in some cases – to clear a backlog of unsold houses.

Earlier this week, Dublin City Council announced that it plans to offer a reduction of about 25 per cent on houses it had already discounted by up to 35 per cent of the original market price, to compete with developers’ discounts.

The city council is taking this step to get rid of a backlog of 300 unsold affordable houses that are costing it upwards of €300,000 a month in bridging loans and fees.

The largest number of affordable houses have been sold in Dublin and the greater Dublin area, where house prices have been highest. However, the recent fall in house prices has resulted in developers lowering their private house prices to almost the same price as, or sometimes lower than, affordable houses.

Buyers of affordable houses must pay a “claw-back” to the council of the percentage of discount they received if they sell their house within 20 years. Private buyers are not subject to such restrictions, and so the incentive to buy through the affordable scheme has greatly diminished.

However, the Meath and Dublin city local authorities are the only ones in the greater Dublin area thus far to cut their affordable house prices. Fingal County Council, Dún Laoghaire-Rathdown County Council, Wicklow County Council and Louth County Council have said they have no plans to reduce their prices.

Meath County Council said it intends to use money ring-fenced for affordable housing under this system to subsidise the cost of houses.

The council has 145 affordable houses either in, or about to come into its ownership.

A further 193 units are due in 2009, following deals with developers, “most of which were negotiated at the height of the market”, a spokesman for the council said. The total value of affordable houses in the council’s ownership would, following the delivery of the 193 units, be in the region of €68 million. The council is hoping to renegotiate agreements with developers where possible.

The council is inviting affordable housing applicants nationwide to attend an information meeting on Meath’s available affordable housing in the Ashbourne House Hotel next Tuesday between 4pm and 9pm. Mortgage lenders will be present.

Fine Gael’s housing spokesman Terence Flanagan TD has called on other local authorities to reduce their prices, but several have said they have no plans to do so. Fingal County Council said its affordable houses were already “significantly cheaper” than those in Dublin city and it had no plans for further reductions.

However, a spokeswoman said it would renegotiate the amount of “claw-back” payable to the council if the market price of a house had fallen between the time the affordable price was agreed and the sale went through.

Dún Laoghaire-Rathdown council said the market price had not fallen in its area to the same degree as in the city. South Dublin County Council said they had 80-100 unsold affordable homes on their lists.

They had no plans yet to discount these units.