The Incremental Purchase Scheme is designed to provide affordable home to those renting social housing or waiting allocation of social housing. The scheme is available to existing and prospective tenants of rented social housing in order to purchase new local authority or approved body housing.
Existing social housing tenants, including tenants of local authorities, approved bodies and under the rental accommodation scheme were given the opportunity to purchase under the scheme. Some new social housing tenants were given the opportunity subject to meeting conditions to become incremental purchasers rather than rental tenants. Applicants must transfer to a new house available as per the scheme.
Under the scheme the title to the house is transferred on payment of between 40 and 60 percent of the total cost depending on income. A charge is placed in the property in respect of the discounted amount which declines in annual increments of two percent until the charge is redeemed.
This charge is placed on the property in relation to the discounted amount. The buyer takes a mortgage to meet the remaining cost of the house and accepts responsibility for the repair, maintenance and insurance.
The scheme applies to new built houses only. They must be identified for sale by the local authority or housing body. Households in receipt of or eligible for social housing support including those in voluntary cooperative and local authority RAS or leased properties may apply.
The purchase price is based on the all-in cost of providing the house. A discount of 40 to 60 percent is allowed depending on the applicant\’s income.
If the property is resold by the purchaser, the amount of the outstanding local authority equity charge is redeemed. The Housing Authority has first option to purchase in the event of resale during the charge period. SI 252 of 2010.
Eligibility for the scheme depends on the level of household income. The relevant degree of percentage ownership retained depends on the bands of income into which the applicant falls.
Local authorities may provide assistance to purchasers to buy, construct or reconstruct their houses. Local authorities may provide loans and grants for the acquisition of properties, provide loans for repair and improvement and provide sites for the construction of houses.
The 1992 legislation permitted local authorities to make loans to voluntary agents and housing bodies.
The local authority may make loans for the repair and improvement of houses. The local authority may arrange works on houses even though not local authority houses for the purpose of rendering them fit for habitation or to relieve overcrowding.
There is provision for the surrender of existing local authority houses in return for grants or assistance for the construction of new houses.
The mortgage allowance regulations provide for mortgage subsidy in respect of loans for the purchase of or construction of it a dewellinghouse. It is available to local authority tenant purchasers or tenant purchasers who purchase an affordable house and surrender of the existing local authority tenancy.
The Affordable Housing Scheme provides for the sale of units at prices before below market value to the persons qualifying on income criteria who can qualify for mortgage subsidy. If the house is sold in 20 years, a clawback applies. Arrangements may be entered with mortgage providers to secure the clawback.
Where lands are transferred under Part 5 of the Planning Act the authority may
- provide or arrange for provision of houses under land or sites concerned;
- may make land and sites available to persons for development of their own houses for occupation;
- make land and sites available to housing associations for housing purposes.
Planning authorities may require as a condition of planning permission, that a person enters an agreement regarding the provision of social and affordable housing. This may involve the transfer of land for social housing and building and/ or completion of completed units. In these cases, the sites are based on site cost. In the case of completed houses, they are based on site cost and building cost as agreed.
There is provision for payment by developers of compensation and lieu of transfer. Social and affordable housing schemes yielded a relatively small number of houses. It became inoperable after the financial crisis and housing price collapse of 2007-2012.
The Home Choice Loan schemes introduced in 2009 provided for loan finance by local authorities, to first time buyers for new house. Eligibility criteria depended on income.
The 2009 legislation provided for an incremental purchase scheme. Under the scheme title to the house is transferred to the occupiers with the housing authority retaining part of the unpurchased equity. The objective is that this should decline over time. The local authorities have the first option to purchase the property upon sale, as to the part of its value not within its charge. The consent of the local authority or relevant housing body is required to resales.
Conditions require occupancy as normal place of residence maintenance. Consent is required to resell. The local authorities obtain a charge in respect of its share in the house. The share charged to the local authority is intended to be reduced over time. A reduction applies after certain number of years of occupation. The reduction of the charge share may be suspended where the purchaser fails to comply with conditions.
The charge may be deferred to a mortgage lenders charge to enable purchaser to refinance an existing mortgage.
Consent is required to resale. It may be refused for specified reasons including that the seller may be left with inadequate housing. There is provision for adjustment of payments to take account of improvements undertaken with consent. The payment to the local authority is reduced where it would cause a net loss to the buyers relative to the original price.
Local authorities may enter arrangements with private bodies PPP or other arrangements in relation to the provision of affordable housing. The Department may make a grant towards the cost of dwelling houses. The key objective is to prevent a segregation and ensuring a mix of social and affordable and other housing.
Local authorities may provide financial assistance to eligible persons to provide dwelling house under an affordable purchase arrangement. They are criteria in respect of eligibility.
Clawback provision applied to profits on the resale of affordable houses. There is a charged share in favor of the local authority or other body equivalent to the original discount.
Special provisions apply for recovery of sums due on the sale of properties. There are simplified provisions for applying to the District Court, including previsions for obtaining possession.