Tag Archives: Rents

From top: Housing Minister Eoghan Murphy this morning with. Dublin Simon Community CEO Sam McGuinness during the launch of Simon Community Annual Review; Anne Marie McNally

Today the Minister for Housing described the level of rent increases in Ireland as ‘unsustainable’. Yet in doing so he offered nothing to actually address the issue.

Unsustainable to him is a word in a press release. Unsustainable, to a family in rented accommodation means potential homelessness.

Yesterday’s ESRI report should be the impetus needed for this Government to call an urgent halt to the dangerous way in which the rental sector in Ireland is developing.

It is surely time for recognition that an immediate nationwide rent freeze is required and it must seriously begin the debate regarding whether or not the Central Bank mortgage rules are having the unintended consequence of driving the rental sector further and further out of control.

The Central Bank mortgage rules were implemented in order to stop people taking on mortgages they could not afford.

But as a result of spiraling house prices, the deposit amounts required get further and further from ordinary worker’s reach and therefore so too does home ownership, this despite the ability of many to comfortably sustain a mortgage repayment.

Instead people have been forced to turn to the private rented sector where they find little to no security of tenure and escalating rental costs which are more often than not significantly higher than the mortgage payment they would have to make if they could just get a deposit together.

Recent data from Daft.ie shows that most mortgages needed to buy one, two or three bedroom properties cost substantially less per month than average rents for similar properties. In some cases, a mortgage is half the cost of the rent.

Similar data was published by Cairn Homes showing that it’s 50% more expensive to rent a property in one of its developments than it is to buy – a situation which cause the Cairns CEO to comment:

“That’s an extraordinary number that people don’t seem to fully understand.”

In ‘helping’ people to avoid mortgages they cannot afford, the Central Bank rules have forced increasing numbers of people to take on rents they cannot afford.

This creates a precariousness in people’s personal lives but also in our wider economy and society which is, to borrow Minister Murphy’s word of the day, unsustainable.

Nobody is winning here – except maybe, in the short-term at least, some landlords.

The ESRI report says the average rent in Dublin is now around €1,700 – a quick check on Daft.ie shows that is very much on the lower end of the properties available.

If you’re a single income household earning in or around the average wage of €38,871 (CSO.ie) per year and renting in Dublin, then a significant percentage (52.5%) of your earnings are being spent just to keep a roof over your head.

(Many households find themselves with little choice but to be single-income because the cost of childcare often makes it impossible for both parents to work full-time).

How, in reality, can anyone be expected to fork out almost €2,000 per month a rent, pay bills, buy food etc., and at the same time save towards a deposit for a mortgage?

While the catchphrase about rent being dead money is common, so too is the more apt one in this situation: ‘you can’t get blood from a stone’.

So we find ourselves in what is essentially a vicious cycle of renters paying ever increasing rents whilst getting pushed further and further away from the prospect of home ownership.

All the while they continue to age and if they do somehow manage to save, by the time they’ve got the deposit together their age becomes an issue for potential mortgage lenders and impacts on the amount they can borrow.

The effect of trapping long-term renters in high rents is that the mortgage rules are actually inflating the rental market AND driving up housing costs for everyone.

While most of the Central Bank rules are very welcome and help prevent people from over-borrowing and taking on mortgages they can’t afford, it does not take account of the significant difficulties facing those forced to rent at all-time high rates.

While at the same time trying to save for a forever-home where according to the Banking and Payments Federation of Ireland, the average first-time buyer’s deposit in Dublin is around the €55,000 mark.

There are already a number of exemptions and lee-ways built into the Central Bank rules for other groups including those in negative equity and for buy-to lets.

The Social Democrats very much support the Central Bank rules but with an addition of common sense when it comes to adapting to changing economic circumstances. We know the Central Bank has not to date been a very customer focused organisation but it is time for that to change.

The very real danger in continuing to ignore the effect these rules are having on the overall economy is that house prices AND rents will rise as the rules will continue to make it more lucrative to put a property up for rent than to sell it.

We can already see this happening with REITs and Cuckoo funds pre-buying units thereby denying first-time buyers the chance to even bid on traditional ‘starter’ homes.

If a renter can prove, over a sustained period that they are capable of meeting high rental payments, are not over-stretching themselves, and are moving to a much more sustainable and affordable arrangement; that should be factored into how much of a mortgage can be accessed by way of reduced up-front deposit requirements.

That’s not risky, that’s just sound economic sense.

Anne Marie McNally is Political Director of the Social Democrats

Rollingnews

This afternoon.

Richmond Street South, Dublin 2.

Via Shaw & Shoddytonic Crew

We’ve tried really hard over the last few months to renew the lease, stay on longer, or buy the place. A lot of things didn’t go our way over the last 12 months either, but it’s out of our hands now unfortunately.

…Dublin is changing, we can all see and feel it but we are going nowhere & we won’t go down without a fight. We’ll start something else, somewhere else [ plans are afoot ] , and keep fighting the good fight.

There are so many young creative, clever, smart people in Dublin & Ireland at the moment – there’s lots to be optimistic about – but they need the spaces to meet each other, make plans, and make them happen!

We’ll have more info, lineups, events, wakes, next steps out over the next few days & weeks…. until the end of October we’re open as normal, we’re ready for y’all and we’re gonna party like its….2019!

It is with heavy heart… (Bernard Shaw)

The Bernard Shaw and Eatyard Are To Close On October 31 (Golden Plec)

Meanwhile…

Meanwhile…

.

Thud.

Last night.

The Tonight Show on VMT.

Good times.

A new report from Nestpick, the world’s largest database for furnished apartment rentals, takes a look at the cost of renting an apartment in more than 700 neighborhoods spanning 50 major cities.

The prices are based on median rents for the last quarter of 2018, so they should reflect the current listings for an apartment. Apartments are considered “affordable” if households are spending 30% or less of their income on rent – a standard used by the US government.

Full Nestpick report here

Here’s what you need to earn to afford a one-person apartment in the world’s most popular cities (Business Insider)

Meanwhile…

 

The company [Nestpick] defines a single person apartment as around 50sq m (plus or minus 10sq m) and a family apartment as 105sq m( plus or minus 15sq m). The monthly salary requirement incorporates an area’s rent per sq m and the average apartment size.

The research found a worker on the minimum wage would need to work more than 279 hours to pay the monthly rent in Dublin 2
.

Monthly salary after tax of €8,900 needed to live in Dublin 2 (Irish Times)

Top, from left: Chris Ciauri, Salesforce; Minister for Finance, Paschal Donohoe; Mark Hawkins, Salesforce; Taoiseach Leo Varadkar; Elizabeth Pinkham, Salesforce; and Dr. David Dempsey, Ireland Country Leader, Salesforce, earlier

This morning.

Taoiseach Leo Varadkar, on his 40th birthday, officiated as US software giant Salesforce announced that it is adding 1,500 jobs over five years.

The company will establish ‘Salesforce Tower’ (above) an urban campus of four interconnected buildings located on North Wall Quay within Silicon Docks.

Reggie writes;

If these are basically call centre/customer support jobs, who will be able to afford Dublin rents?

Anyone?

Salesforce to create 1,500 jobs with Dublin investment (RTÉ)

Earlier: Not Fit To Hold A Candle

rentrent2

Rental prices increased throughout 2016 at their fastest annual pace since the website daft.ie started compiling statistics on the rental market in 2002.

Average rents nationwide rose by 13.5% in the year to December, according to the latest report from the property website.

At €1,111, the average monthly rent nationwide is at a new high, the third successive quarter with a record high according to daft.ie.

The annual rate of rental inflation in Dublin is running ahead of the national figure at 14.5%.

The average monthly rent in the capital, at over €1,650, is now almost €200 higher than the last peak in early 2008, despite the subsequent property crash and a sustained period of low inflation in the interim…

The Daft Rental Report

Rents increasing at record pace, report finds (RTÉ)

Graphs via Daft

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Private tenants in Ireland pay the second highest monthly rent in Europe.

The European average is €481.

Meanwhile private rented households in Ireland spend almost 34% of their income on paying their rent, compared to a European average of 28%.

FIGHT!

Private renters in UK pay double the European average (Gerard Koessi, National Housing Federation)

Thanks Donough Ryan

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focus

Joan Burton (top) and Focus Ireland’s warning (above)

Rents in Dublin increase by 20 per cent.

No rent supplement increase since April 2013

Why?

According to the Department of Social Affairs:

increasing the rent limits would have several potentially negative effects, including:  providing an impetus for current Rent Supplement landlords to renegotiate their lease agreements to the new limits, impacting on all existing recipients; and Creating new rental floors for all properties in the sector, meaning rent increases for those not in receipt of Rent Supplement. These would include many individuals and families who would struggle with such increases, such as low-income workers and students…

Focus Ireland respond:

The Tánaiste’s decision not to make any increase in the maximum rents payable by households in receipt of Rent Supplement will effectively sign the eviction notice for hundreds of families over the coming months.

We believe that this report [Review of Rent Levels]  has no credibility as an objective review of the income levels which households which rely on social welfare need to hold onto their homes. It is essentially a statement of how the destitution of households dependent on Rent Supplement is to be used as a crude measure to moderate rents in the private rented sector

For over a year, we have been drawing attention to the fact that the levels of Rent Supplement have fallen well behind the actual rents required by landlords. This has resulted in substantial increases in general homelessness, and unprecedented homelessness among families.

Over 100 families have lost their homes and been forced to live in emergency B&Bs or hotel rooms in the first two months of this year alone. Virtually all of these families have become homeless due to rising rents in the private rented sector.

The Review of Rent Supplement levels published by the Department of Social Protection  sets out extensive and detailed evidence that rents have escalated in every area of the country since the last review over 20 months ago. It notes that the average increase over this period is over 14% and that the increase in the areas where people who rely on Rent supplement live have been even higher.

Since the middle of 2014, the Tánaiste has stated that the impact of rising rents was ‘under review’, the publication of this report draws to an end the pretence that she is going to make an effective policy response to this crisis. She is not going to give these household the resources to pay the market rents that their landlords are requiring.

The purpose of the Rent Supplement scheme is to provide support to people whose means are insufficient to meet their accommodation costs. However the Department appear to be using the Rent Supplement scheme to achieve a range of other goals, with very negative consequences on those who depend on the scheme to provide their home.

We intend on seeking legal advice as to whether the Department of Social Protection is acting outside its legal remit in failing to give adequate priority to the objectives of the scheme as set down in legislation.

FIGHT!

Focus ireland (Facebook)