Families struggle to afford homes as rents keep soaring

RENTAL costs across the country have jumped by 4.8 per cent as families and young professionals struggle to find an affor able home.

The average rent is now €824 and the annual increase nationwide accelerated to 4.8 per cent in the third quarter of 2013, up from 4.2 per cent in the second quarter, according to the quarterly Daft. ie Rental Report.

In Dublin, rents were 7.6 per cent higher than last year which Daft attributes to a ‘very tight supply’. In the capital, there were fewer than 1,500 properties available to rent on November 1,

Almost one in five in rented sector

compared to more than 6,700 on the same date in 2009.

Bob Jordan, chief executive of housing advice charity Threshold, said: ‘There is a huge shortage of rental properties. If we combine this with the fact that people who would have traditionally bought their homes are not in a position to do so now, while those who would have accessed local authority housing in the rented sector are no longer able to do so due to a shortage of l ocal authority homes... Then we consider also there is very little building in the last few years and those homes which were built are in short demand, we can see why this i ncrease i s happening.’ Almost one in five households are living in private rented accomodation, according to Mr Jordan. He added: ‘That’s almost doubled since 2006. Less than 1,000 new houses will be built this year. Last year, 8,500 were built. Even with levels of emigration, we have our population is increasing and we need 20,000 units just to meet demand.

‘Rents are going up and people whose incomes have been affected can’t afford them, while those at the lowest scale will be pushed into the poorest accommodation and they can’t afford anything.’

Mr Jordan said that the State may have to consider introducing a housing ombudsman, as in many other countries, to control the rental pricing sector – but he also said that more homes need to be built to meet demand as a matter of ‘urgency’. Rents in other cities are rising but less rapidly, with the exception of Waterford city, where rents continue to fall, at a rate of 1.6 per cent annually.

In Cork and Galway cities, rental inflation is between 3 per cent and 4 per cent, while in Limerick, rents are 1.8 per cent higher, the first annual increase in rents since late 2007. Outside of the cities, rents rose by 2.7 per cent in Leinster and 0.9 per cent in Connacht-Ulster but were static in Munster.

Ronan Lyons, economist at TCD and author of the Daft report, said: ‘An acute shortage of rental accommodation has now emerged in Dublin, with fewer properties on the market now that at any point since records start in January 2006.

‘Clearly, any Nama supply in the capital would be a welcome addition in easing tenant concerns. Elsewhere, markets look relatively balanced with oversupply from 2009 having corrected itself in many counties.’ Meanwhile, economist Colm McCarthy has warned against another emerging property bubble caused by the lack of housing being built in the State.

Mr McCarthy wrote in yesterday’s Sunday Independent that the annual increase of 12.3 per cent in Dublin house prices was ‘worrying’ as it comes at a time of mortgage credit shortage.

‘Whatever increase is happening in Dublin is happening in the middle of a mortgage famine. If mortgage availability was back to even normal levels, it is a fair guess that Dublin would now be i n the middle of a renewed bubble in house prices. There is nothing to celebrate.’