PUBLISHED22/01/2015 | 02:30If the plan proceeds, it means we’d need to save a deposit of 20pc of the cost of a house, which could be as much as 15pc more expensive than this time last year, while renting in a market which has seen increases of up to 50pc, and earning 0pc more, in most cases.
It’s difficult not to be reminded of the ‘Three Fs’ when you look at the conundrum potentially facing a large chunk of our population. I’m not talking about expletives here – though a few spring to mind. Instead, I’m referring to the series of demands first issued by the Tenant Right League in the campaign for land reform in Ireland from the 1850s. These comprised Fair Rent, Free Sale and Fixity of Tenure.
Many a historian claims that an absence of the ‘Three Fs’ contributed significantly to the Famine, as it allowed mass eviction of starving tenants. Those who fought for the Land Acts would turn in their graves if they saw what was going on now.
Karl Deeter, from Irish Mortgage Brokers, says: “If the ECB introduces a 20pc (deposit) rate, the people who would be potentially shafted are those who had nothing to do with the boom. Those who were potentially buying are now being pushed into renting. It’s lunacy.”
The number of properties listed to rent has dropped from 47,000 in 2011 to less than 27,000 in 2014. There are twice as many people looking to rent now than there were in 2006, and back then there were 93,000 housing units built compared with a meagre 8,300 in 2013.
“Dublin City Council have reported the lowest vacancy rate in 200 years. There are 100,000 people looking for social housing in Ireland. We are heading towards a new and different kind of crisis,” Deeter warned.
There are 10,000 new households in Dublin this year and demand outstrips supply. In many cases, people are faced with rental increases of up to 50pc in the capital. Last time things went pear-shaped we had too many houses, now we don’t have enough.
Back then, everyone and anyone could borrow money, now, as unemployment stands at 10pc and many people live in single-earner households, few of us can borrow.
“That’s our plans of buying out the door,” one friend informed me. “I work, my husband has gone back to education, and the money I could borrow alongside the money I would have to raise means it would be impossible to buy any time soon.”
So we’ve become a nation of ‘accidental renters’, and ‘accidental landlords’ can pretty much charge what they want. The only law that exists is that you can increase the rent just once a year. That’s it. A lot of the landlords these days are people who bought frivolously throughout the boom, have huge mortgages, but are now also renting cheaper and smaller places to pay these mortgages. Needless to say, they are more than happy to charge through the nose. A friend recently informed me that he had to move out of his one-bed apartment, because his rent was being increased from €950 per month to €1,300 per month to keep in line with “market rates.”
When it comes to renting, the single professional living in a city is the hardest hit. “I simply can’t keep myself in the squalor I’ve grown accustomed to,” my friend said. “I could move to Kildare, but then I’d have to drive back and forth each day, so the difference in savings would be minimal.” When I looked to see what was available in his price range, I didn’t know whether to laugh or cry. There were 23 properties available in Dublin city under €950 and only a handful of properties below the €650 range, which “don’t accept rent allowance.” Alarmingly, thousands of people had viewed these properties and the one where the single bed was squished between a microwave and a fridge was snapped up immediately. There was nothing for €520 or less, the official amount for which a single person can claim rent allowance.
“Rent supplement limits need to be increased and rents need to be regulated. We need a twin-track approach and we need security for tenants,” says Bob Jordan, CEO of Threshold, the national housing charity. “We need to be more like our European neighbours, where landlords aren’t just profiteering.”
The situation won’t improve because even if the bulldozers arrive today to build new properties, it will take two years at least before they are available, so the situation will get worse before it gets better.
I read back in December that Joan Burton had suggested that a reform of the system in general would be looked at but that there were constitutional issues around rent control. She suggested that people who were having difficulty with landlords and renegotiating rent should contact organisations like Threshold. I never heard back from her office when I called her for commentary on the crisis.
This week, the head of Europe’s bailout fund, Klaus Regling, said property is a “national obsession” in Ireland. The way things are going again, who can blame us?