Home economics: Answering your property questions
Our property expert on how the Tenant Purchase Scheme works and advice for home-owner who is concerned their house will be repossessed.
Question: I heard at a local meeting that my County Council (Meath) is allowing people to buy up local authority homes with a cheap loan. Can you tell me how I can qualify and what the rate might be? I don't know if I'd get a normal mortgage, so this looks like a good idea.
Sinead replies: It is a good idea. However, the Tenant Purchase Scheme only applies to existing tenants buying the property they currently live in. That may not be the case with you, but if you are a local authority tenant, then it operates as follows:
From January 2016 a successful applicant gets a discount (40pc-60pc) off the purchase price linked to their income level. They must have an income of at least €15,000 p.a. (and be in receipt of some form of social welfare) and not be in arrears on rent or water charges.
The council decides what properties it's making available and it won't apply to all. The purchase price is the normal market value, less the discount allowed. There is no deposit required and you can take out a mortgage with a bank or from a local authority loan, and undertake to keep the property insured and in good order.
If you resell the house within a specified period, you must pay back the housing authority some or all of the discounted amount on a sliding scale over five to 30 years and the council gets first option to buy it back.
Contact Meath County Council or your local representative in the new year if you feel you might qualify.
Question: I'm terrified of losing my home. I've been in arrears for five months due to losing my job and have received phone calls from the bank (I've disconnected the phone because it's stressing me out so much).
I have now started getting letters threatening me with repossession and losing my home and I don't know what to do next. I can't afford it all, but am going for interviews and have picked up some part-time hours in the meantime with my old employer. I can't afford to go to court - can they repossess my house in the meantime?
Sinead replies: I'm sorry you find yourself in this predicament. I hope you know that you're not alone. Firstly, you are not going to lose your home. The repossession process is a lengthy one and it is highly unlikely to happen, so please stop worrying about it.
In fact, over the past eight years just 1,471 homes have been repossessed, out of an estimated 120,000 in arrears. Judges are exceptionally slow to grant such orders and only do so after several years of adjournments, and generally only where the borrower has made absolutely no effort to turn up or address the issue.
The immediate concern is you are not engaging with your bank. By avoiding phone calls and ignoring letters, you are giving them no alternative but to get stroppy. The minute you give them a call to at least outline your situation, they are obliged, by law, to outline your options (of which repossession is the very last step), and help you through this. Under the Code of Conduct for Mortgage Arrears they will first ask you to complete a Standard Financial Statement which outlines your income and outgoings. You can have a look at this by Googling it. They must help you fill it out.
However, if you're really worried, I would strongly urge you to do two things: contact the Money Advice and Budgeting Service (MABS.ie or call 0761 072000) or the Free Legal Advice Centre (www.flac.ie 1890 350 250) who have helped hundreds of people like you.