Are people really giving up on buying a home?

Are people really giving up on buying a home?

There has been much discussion in recent weeks about the Central Bank’s new rules and what impact they have had on the housing market.

Too often people with vested interests, be it estate agents or builders, are the ones having the say on the rules. This was noted by chief economist of the Central Bank, Gabriel Fagan, earlier this week when he said it was wrong for the property industry to blame the lending rules for any developments in the market they did not like.

However, it was sad in many ways to see a survey yesterday which found that six in ten people in Ireland had given up on owning their own home.

The survey by Co-operative Housing Ireland found that those in the private rental sector were particularly downbeat on their chances of owning a home.

Who could blame them either? It’s difficult for anyone to come up with a 10 or 20 per cent deposit when they are paying huge rents on top of their normal day-to-day expenses and other bills.

While last month the Government unveiled new rent measures, 70% of Dubliners also expect rental increases in the next 18 months which won’t help their task of getting their own home.

Indeed 56% of those surveyed say the Government isn’t doing enough for the private rental sector despite recent measures.

The survey also found that people living in the capital spend a higher proportion of their income on rent than renters in the rest of the country – an average of 36% in Dublin and 33% elsewhere.

Fagan might have claimed it would be next year before the true effects of the Central Bank’s rules could be seen but already many people have given up their dream of owning their own home.

No one condones dangerous lending practices but that is something to pity.

Let us know your experience of the situation.

  • Have you given up on owning a home?
  • Are you currently saving for a deposit?
  • How difficult is it to save at present?

Have your say below…

There are 8 comments for this article
  1. Ali at 10:00 am

    I bought a 3 bed house in 2006 in an area of Dublin that is far from my family/friends and am now 150k in negative equity so cannot sell. I would love to rent it out to a family for a reasonable amount (I don’t want a profit – 1k a month would cover my mortgage) but I would have to pay up to 48% of the rent I take in to the revenue. So roughly out of the 1k I take in I will only receive €520 making me have to pay the balance along with the rent I would be paying for my own alternative accommodation. Unfortunately to make it feasible I would have to substantially increase the rent to cover the tax bill so it is not something I have pursued. There are a lot of single home owners out there who are stuck in unsuitable accommodation that would happily rent out their homes. I would rather have a small one bed apartment for myself and have my 3 bedroom house accommodate an entire family. It would be great if more measures came in to help the ‘accidental landlords’.

    • Peter Grant at 2:09 pm

      In a free market you would be allowed benefit from your investment irrespective of whether it is in negative equity or not.

      Being an ‘accidental landlord’ simply means that you don’t charge management fees and can be flexible in your dealings with clients. This is a cost benefit to the state which is not recognized at present.

      In Ireland Tenants and Landlords are the same people, just at different times in their life cycle.
      The current housing authority who advises the government seem to have an ideological problem with supporting private landlords.

      The housing problem will continue to worsen until this changes.
      Both Tenants and Landlords deserve better treatment at this time.

  2. Pingback: Are people really giving up on buying a home? | Rosalie Rodney
  3. PEADAR MACMILLAN at 4:54 pm

    Based on what I have read about the new modular homes – the cost is approx 80 k per 3 bed unit – detatched . They estimate they cost the same as building, just they are fast tracked. Therefore, we know it costs 80 k per 3 bed house. Next step, compulsory purchace orders on lands around the cities, also nama land [which we supposedly own – tax payers] at 20 k per site. Run all services in – co co etc esb at cost price – Bobs your Taoiseach – Affordable housing units at 100k. tHEN MY DAUGHTER, PUBLIC SERVANT ON 25K PA with2 children under 2 can buy a house – instead of paying 1200 pm for a 2 bed apt with no garden etc.,
    And I am not even good at maths – music yes – maths no.
    Now – if you put banks, builders, politicians etc etc into the equation – all they will see is – what the F### BOYS CAN WE MAKE OUT OF THIS SITUATION – LETS RUB OUR HANDS IN ANTICIPATION OF LARGE PROFITS !!!!!! Am I cynical – yes I bloody am – after 56 years living here – cynical is my motto.
    Let young people get their hands on affordable housing – it can be easily done – but only if the right person is in charge – perhaps put Stan Kennedy and Peter McVerry in charge ?

  4. Caroline at 1:53 pm

    I purchased one bed apartment in 2003 lived in it to 2012 family circumstances changed due to illness/bereavement had to move out. Property in negative equity rented it with new taxes 2010 USC on your income, Property Taxes, NPPR, Water Charges, Insurance Premiums and Maintenance Fees inc. from (€900 to €2,050 annual) not financially viable to keep the property rented topping up every year.
    Sold the property this week, with a loss of €40k in total between purchase and sale price, stamp duty, estate agents and solicitor fees .
    Central Bank Mortgage restrictions impacting first time home owners and new govt restrictions on Landlords renting many will now exit the market! Be prepared to take a risk.

  5. Chris at 12:38 pm

    People would rather pay Interest Only mortgages than pay rent. Next March I’ll have to move my family to a new home for the 3rd time in 5 years as long term rents are too hard to come by in Ireland. I’m not bothered if I ever own the bricks and mortar, the land, of my home. I do want the security to let my children grow up and for my wife and I to grow old in a place that we can call home without the fear of never being able to settle in one location.

  6. Pedantic Panda at 12:23 pm

    It is indeed sad but shouldn’t be used as an excuse to dabble much with the lending rules although I could see some rationale for relaxing the deposit end of things. If your finances show that you could easily cover the loan if you weren’t paying rent then 10%/20% of deposit shouldn’t really be necessary but there should still be 5% deposit rule to show people are at least trying to save and have a bit spare every month.

    Don’t forget too that there is a certain nihilism or negativity to the Irish spirit e.g. ah he never amount to anything, I’ll never pay my water charges, the country id f*#ked, might as well turn off the lights, etc. People say that they’ll never own their own home but if they REALLY wanted to then they could probably do it. They may never own their own home if they’re out every weekend, getting taxis home, buying new handbags/golf clubs all the time, eating take-away 2 times a week and so on. People won’t want to sacrifice their lifestyles or take on second jobs to reach the goal. I appreciate that there’s a certain number of people for whom even such sacrifices would make no difference but does lending large amounts of money to this group benefit anyone in the long run or does it just heap unsustainable debt on those least well positioned to handle it.

    • Peter Grant at 3:02 pm

      Point well made, If we are to face up to reality, we would reasonably expect that we are entering a prolonged period of deflation.
      This rules out the option of high risk borrowing so therefore we need to be realistic about our expectations.
      The government has killed off the buy to let market crushing so many in the business with excessive taxation and below cost Rent supplement. { If we value a house by its replacement cost today}
      This has also removed any margin for builders or further investors to become interested.

      The only new homes likely to become available for couples on modest incomes will be those provided by the state. Which can be purchased down the road at discounted prices.

      We are likely so see more people renting rooms and sharing homes in the near future.

      Renters and landlords should work together and stop allowing the government muddy the water.

      The housing crisis has been created by this government. Only by getting out of the way of those who wish to supply homes will the situation improve.
      Irish people have always valued private ownership and changing this will not serve us well in the future.

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