moneysherpa.ie analysis shows that the average renter now pays over €3,500 a year more than a buyer taking out a 90% mortgage on the same property.
So renters are paying at least €1,000 more a year than buyers in every part of the country apart from South County Dublin, which is the only region where it is actually cheaper to rent than to pay a mortgage.
Those that can’t buy, therefore will pay over a €100,000 more over 30 years than an equivalent buyer, and at the end of that period have nothing to show for it.
That makes it very hard for renters to build any real financial security for their family.
Why
The root cause of this is of course the lack of housing supply driving up housing costs for both renters and buyers.
However the latest rental report from DAFT indicates that rents are up 8.0% year on year, while our analysis shows mortgage repayments are only up by around 5% on average, so the burden is still mostly falling on renters who are already the most vulnerable.
This imbalance shows that more support is needed for renters who may be looking to buy.
What can be done?
More easily accessible credit from mortgage lenders. We still have some of the tightest lending rules in Europe, after all most of these renters are regularly making payments higher than a mortgage would be so should be able to get a mortgage.
More easily accessible support from the government to bridge any remaining gap in funding.
What is in the way?
Some worry that expanding funding to help renters buy will inflate house prices.
It will of course, but it will also make housing purchase more accessible as buyers will have more help and it will reduce rents which will then in turn reduce housing costs for those who are most in need, those renting.
The recent rent tax credit is welcome, but doesn’t help those looking to buy to get out of the rental poverty trap permanently; it's just a sticking plaster.
17 ноя 2023
