“Guaranteed” prices for affordable homes at Ballymastone set to change

In May 2021, Fingal county councillors voted through a deal to partner with Glenveagh Living Ltd to develop hundreds of homes – 60 percent private, alongside 20 percent social and 20 percent affordable – on council lands at Ballymastone near Donabate.

At the time, the sales prices for the affordable-purchase homes were presented as a sure thing.

“A key parameter set by the Council for the project were the sales prices of the private discounted units which have been set at €250,000 for a 2-bed house and at €270,000.00 for a 3-bed house,” said a report to councillors at the time.

“This parameter was set to ensure the affordability of the private discounted units and leverages the value of the Council’s land to achieve these sales prices,” the report says.

A council press release after the vote said: “There will be a guaranteed delivery of affordable homes to first-time buyers at a unit cost of €250,000 to €270,000.”

A press release posted by Fine Gael also quotes Senator Regina Doherty on the “guaranteed pricing of between €250,000 – €270,000” for the affordable homes.

In a written query to an Balbriggan/Rush-Lusk/Swords Area Committee meeting last Thursday, Social Democrats Councillor Paul Mulville asked council managers if they could give assurances to homebuyers that those prices were still locked in.

The response didn’t offer that.

“Prices will be verified following indexation, which is due to take place in December 2023,” said a reply, from two officials in the council’s housing department. And, the prices “will be based on a discount from the market value rather than on the prices listed in the contract”, they said.

Mulville said that if the prices are higher than promised, that will be a shock. “It will be a massive betrayal for the local community, for first-time buyers.” The homes need to be sold at the figure given to elected members at the time of the vote, he said.

A spokesperson for Fingal County Council said that indexation is a standard condition in construction contracts that reflect inflation, and increased costs of delivery in long-term agreements.

The sales prices for the affordable homes at Ballymastone – or Balmaston as the development is now called – are determined in line with the Affordable Housing Act, they said, which says they should be “between 5%-40% below market value”.

A spokesperson for Glenveigh said: “Affordability is at the heart of this development and across the business our commitment is to deliver highly energy-efficient homes, generating huge savings on heating bills for homeowners into the future.”

Why the change?

Glenveagh and Fingal County Council have said they plan 1,200 homes on the lands at Ballymastone. In March, Glenveagh got planning permission for 432 homes in phase one. Construction on those started in August.

The report that went to councillors in May 2021 said that the costs for the social and private-discounted homes were fixed for the first three years. “And are subject to review every three years from the base date as set out in the Development Agreement.”

A spokesperson for Fingal County Council says that the base date was November 2020. So, the review date was November this year.

In the city, Dublin City Council renegotiated a similar kind of arrangement with the developer Bartra at the end of 2022, for a big mixed-tenure housing development on lands at O’Devaney Gardens. Construction inflation made that necessary, said a council manager at the time.

Construction costs in the Greater Dublin Area for a three-bed semi-detached home have risen by an average of 24 percent or €90,ooo in the last three years, says a recent report by the Society of Chartered Surveyors Ireland.

Labour Councillor Robert O’Donoghue, who chairs Fingal County Council’s housing committee, says he doesn’t know for certain why the prices of the homes may have gone up at Ballymastone. But “I’d imagine it is to do with construction inflation”, he says.

There was a lot of demand for affordable-purchase homes in Rush, he says. Sales prices ranged from a low of €228,000 for some two-beds to a high of €299,500 for some three-beds.

He expected that the price of the homes in Ballymastone would be similar, he said.

The schemes

It isn’t surprising for Fingal officials to say that the prices of the affordable homes at Ballymastone will be metered off the market price, says Sinn Féin TD and housing spokesperson Eoin Ó Broin.

That is the way that the government’s affordable housing scheme works and one of the problems with it, he says – that it is based on a discount from the market price, rather than the cost of building homes.

“The central problem is that the government is starting in the wrong place,” says Ó Broin. “You cannot have an affordable housing scheme that starts with market value and then applies a discount.”

The affordable purchase scheme should be designed to provide homes for the cohort of people that are currently locked out of the purchase market, he says. “You have to start with who these homes are for and what price is affordable for them.”

Once the homes in Ballymastone are sold, he would like to see a breakdown of the real costs of delivering the homes, he says. If the state has provided the land, what are the construction and financing costs, and what is the developer’s profit margin?

Finance costs are around 10 percent of total costs, he says, so if the state funded the homes that would help to reduce the costs.

He was surprised to see the price of an affordable home in his own area in South Dublin County Council coming in at around €425,000, he says.

So in that case, even after the council takes a slice of the equity in the home – which it can do under the Affordable Home Purchase Scheme to help people bridge the gap between their mortgage and savings, and the purchase price  – the purchaser will likely pay around €325,000, he said.

“Affordable” homes in the city centre are likely to be significantly more expensive than the ones in the suburbs, he says. “The urban cores will be even worse.”

A spokesperson for Fingal County Council said that the new prices for the affordable homes at Ballymastone will be determined in the first quarter of next year. “And will be advertised at that time.”