Home truths about the housing crisis



It hasn’t gone away, you know – the housing crisis. Nor is it likely to any time soon. Surely, in the name of all that is sacred, to put a roof over each of our five million plus people – without breaking the bank – should not be beyond the realm of governance and some joined-up thinking.

Mortgages are rocketing. Even interest rates charged on local authority mortgages have risen by up to 0.65 percentage points on fixed rates. This has left some new borrowers unable to secure a big enough loan to buy homes they had a sale agreed on.

The Local Authority Home Loan scheme was introduced to provide State-supported lending to first-time buyers who could not get a mortgage from a private lender because their income was too low.

On mortgages up to 25 years, the interest rate has increased from 3.35% to 4%. For 25-to 30-year mortgages, the rate has increased from 3.45 to 4%. Mortgages already drawn down are unaffected.

To qualify for the local authority mortgage, single applicants cannot have an annual gross income of more than €70,000. Joint applicants must earn less than €85,000. However, these council mortgages have a very high rejection rate. More than half of applications to local authorities were rejected last year, figures from the Housing Agency show.

In more (bad) news some of the interest rates being charged by vulture fund servicer Pepper have hit 9%, putting punitive pressure on borrowers. This rate is twice what is available on the market, but people with Pepper are mostly unable to move to another lender.

Elsewhere, the asking price for properties increased by 4% in the third quarter of this year. A report by MyHome.ie shows a second successive quarter of increases, with buyers paying a 3% premium over asking prices in September. The annual asking price inflation was 3% in Dublin and 4.9% elsewhere, Kilkenny included. Houses are on the market for an average of €330,000, with in Dublin the average is €425,000, while the average mortgage approved for first-time buyers is at a new high at €298,800, an annual increase of 4 per cent.

Assuming, of course, that you can find a home in the first place. Hence, many adult children are back with mam and dad.

As mortgage rates continue to rise, the Competition and Consumer Protection Commission (CCPC) has published advice for consumers on how to ensure that they are getting the best rate on their mortgage. The CCPC also provides an independent mortgage comparison tool to make it easier to find the best rates.

The advice is particularly aimed at those mortgage holders on standard variable rate or fixed rate mortgages which are due to expire in the coming months.

In March 2022, Minister for Housing Darragh O’Brien confirmed that a referendum on inserting a right to housing in the Constitution could be held as early as 2023. However, one wonders if it’s necessary to enshrine a right to housing in the Constitution to realise the aim of building more homes through the compulsory purchase of land and if a specific right to housing is not necessary to realise this aim, which was the agenda behind the 1973 report known as the Kenny Report.

One of the questions in that report, 50 years ago, was whether the Constitution imposed obstacles to the introduction of laws to regulate the price of building land, or laws to eliminate many of the obstacles to the speedy rollout of major housing projects.

The Kenny Report’s conclusion was that legislation should be introduced to allow local authorities to compulsorily purchase land at existing values plus 25%, with this land being managed by local authorities or later sold onto developers, with the aim of reducing land costs for housing.

The report’s recommendations, for numerous reasons, legal and otherwise, have never seen the light of day.

I have to ask were the Kenny Report to be reactivated, then Minister O’Brien’s referendum would not be necessary and would save time and money. Anyway, the proposed referendum hasn’t happened. But, sure there is always tomorrow.

Meanwhile, the homeless figure edges towards 13,000 while the dreams of many having their own home have become a nightmare.

Sadly, though, not a wake-up call for those in power who promise to deliver, as was evidenced in Budget 2024 which failed utterly to seriously tackle the housing crisis.

And, please, don’t get me started about those tax breaks for landlords, or the Help To Buy scheme which is just pushing prices up.

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