Labour are planning to off load the Nation's stock of Local Authority homes for 40% of their slumped value. Many Local Authority homes are already standing at only 30% of their former value. Selling them off at a further 60% discount would mean that they would effectively be sold for as little as 18% of their former value.
Under previous schemes Tenants were allowed a discount on open market value of 3% for each year of their tenancy subject to a maximum discount of 30%
Purchasers will be offered Local Authority Finance if they can demonstrate they have been refused a mortgage by mainstream lenders. At the moment many Local Authorities collect less than 50% of mortgage payments a difficulty that has predated the property crash.
Approximately 10% of the National Housing Stock is owned by Local Authorities. Many of the Stock units were added at enormous cost per unit, running to €300,000 per unit, many of which immediately were in negative equity at the peak of the property market.
There is bound to be a political dividend if so many voters believe that they are getting a good deal in buying their homes at massive discounts. In the past massive numbers of Local Authority Homes were sold in the UK under Mrs. Thatcher.
Local Authority Homes are let on a Differential Rent System where by rent increases in line with household income.
The Independent reports, that typically a House valued at €200,000 will now sell for €80,000 under the new scheme.
I know of few houses in Local Authority ownership worth anything near €200K. This is clearly spin designed to puff the argument that the scheme is aimed at raising revenues for the State.
Currently up to 10% of Local Authority Homes have extensive repairs and refurbishments carried out each year typically costing as much as €100,000 per unit. Would people take better care of their homes if they owned them?
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Buying your local authority house or flat