Big promises abound, but from a Government that has trouble with numbers
WHEN it comes to the housing crisis, some are already claiming Budget 2019 is a “landlords’ charter”. There are big new claims here overall – namely a €725m hike in housing, planning and local Government funding and €2.4bn will be spent on housing in 2019, up 25pc.
There is a return to 100pc mortgage interest relief for landlords, which won’t be popular at a time when Daft.ie shows rents averaging €1,304 nationwide – 34pc above the last peak.
Unpalatable though it might seem, something was needed to deter “mom and pop” landlords from leaving the market – almost 80pc of landlords own just one property and a recent assessment of Sherry Fitz Gerald data shows 35pc of vendors selling, with just 18pc buying. But the real pain for landlords comes with USC, PRSI and other charges. So this marginal benefit won’t prevent them leaving.
In contrast, the notes that didn’t play in the Budget composition made sweet music for “super landlords” – the big funds buying up entire new apartment blocks to rent en masse. The failure to raise stamp duty to the commercial rate of 6pc is a glaring omission that enables inflation.
New units are not subject to the years-long freezes imposed on mom-and-pop rents. It means funds can charge what they like when renting them out by the dozen. Big block purchases also prevent older people from trading down as units are not offered for general sale.
The announcement of 10,000 new “council” houses sounds great until you start picking at the detail. It seems only 6,000 of them will be newly built, the rest leased or acquired. But some are better than none.
An extra €121m has been promised for the Housing Assistance Payment (HAP) in 2019 to provide for an additional 16,760 tenancies.
Helpful enough until we hear the Simon Communities telling us that just 6pc of properties advertised qualify for HAP. The establishment of a €310m Serviced Sites Fund to support local authorities is a welcome move to help ready sites.
Disappointingly, there was no mention of the expected Help to Buy II. The scheme has helped increase the supply of new homes to market by getting smaller builders going on sites that wouldn’t otherwise be economically sound to develop. In an assuring nod to core Fine Gael voters, Paschal Donohoe promised coming adjustments for the RPT would be fair.
Numbers
There are big promises here, but we won’t know how big until we tease out how many of them are genuinely “new”, from a Government which seems to have such a lot of bother with numbers.
Lastly, where did the Granny Flat Grant go? Among the items earmarked prior to Budget Day, it was not namechecked in the speech.
Afterwards Housing Minister Eoghan Murphy said a “pilot scheme” now running in Clondalkin under the Abhaile initiative would show if it could work. When pressed about how many homes were being tested, the minister appeared to suggest it was just one.
So we’d better take real good care of that granny.