Amid Ireland’s ongoing housing crisis, the Affordable Home Purchase Scheme has launched in Limerick, offering a small number of homes at a reduced price. Administered by Limerick City and County Council, this scheme provides an opportunity for moderate-income households to buy new homes, with the council taking an equity share in the property. However, with only 12 homes available, the scheme does little to address the overwhelming demand for affordable housing in the region. Affordable Housing Scheme in Limerick
Who Can Apply?
The scheme is open to First-Time Buyers and Fresh Start applicants—those who previously owned a home but no longer do due to circumstances like relationship breakdowns or financial insolvency. Applicants must demonstrate that they cannot afford a home at its open market value, even with their combined deposit and maximum mortgage.
How Affordable Is It Really?
The so-called “affordable” purchase price is calculated by the council based on the buyer’s financial situation, including their maximum mortgage capacity and savings. The council retains an equity share in the property, reducing the upfront cost for buyers. However, the reality is that these homes, with a market value of €300,000, still remain out of reach for many people on moderate incomes.
For example, an applicant earning €60,000 would pay €266,667 for their home, with the council taking an 11.11% equity share. While this does reduce the purchase price, the homes are still priced at levels many would struggle to afford, even with the discount.
Eligibility Criteria
Applicants must meet strict eligibility criteria, including:
- First-Time Buyer or Fresh Start Status: Applicants must not have previously owned a home or qualify under the Fresh Start provision.
- Residency: Applicants must have the right to reside indefinitely in Ireland.
- Income Limits: The applicant’s gross household income must fall below a certain threshold, calculated as four times their income and less than 85.5% of the market value of the home.
- Savings Limits: Applicants cannot have more than the required deposit plus an additional €30,000 in savings.
- Mortgage Approval: Applicants need to either secure a mortgage or apply for a Local Authority Home Loan.
Limited Availability
There is no rolling application process for this scheme. Each housing opportunity is advertised individually, and when new homes are available, they will be announced on Limerick City and County Council’s website and social media platforms. The latest offering in Brú na Gruadán, Castletroy will open for applications on August 19, 2024, and close on September 13, 2024. However, with such limited availability, this scheme offers little relief to the broader housing emergency facing the region.
What is the Equity Share?
The council retains an equity share in the property, which represents the difference between the purchase price and the open market value. While homeowners can choose to redeem this share at any time, most will likely be unable to do so, leaving the council with a claim on the property when it is sold or transferred, or after 40 years.
A Small Step in the Midst of a Housing Crisis
Although the Affordable Home Purchase Scheme offers a glimmer of hope to a lucky few, the reality is that it barely scratches the surface of the housing crisis in Limerick. With only 12 homes available, the scheme falls short of providing a meaningful solution to the overwhelming need for truly affordable housing in the region. As the housing emergency continues, more substantial measures are urgently required to address the growing demand for affordable homes across the city and county.
For more information, visit the Limerick City and County Council website, or contact them at affordable@limerick.ie.
Affordable Housing Scheme in Limerick