Responding to the most recent Daft.ie rental Report for Q4 2020 IPAV, the Institute of Professional Auctioneers and Valuers, said it is notable just how much more expensive it continues to be to rent a home rather than buy one.
Pat Davitt, IPAV Chief Executive, said the report highlights that even forecasting for a two percent rise in interest rates, something that is unlikely in the foreseeable future, servicing a mortgage is still substantially cheaper in most areas of the country, provided one can qualify for a mortgage.
“This highlights just how malfunctional the property market remains. Those on average wages, with an ability to repay a mortgage are stymied by the severity of the Central Bank mortgage rules.
“There are would-be first-time buyers who have been unable to acquire a first mortgage because of the fallout from the last financial crisis and are now in their late thirties and forties. The situation is going to have a negative impact on their financial wellbeing into the future, it is likely to mean poverty for many in later life,” Mr Davitt warned.
He said it remains to be seen if the promised Affordable Purchase Shared Equity scheme where the State will provide equity support to those seeking to buy homes but are unable to secure the full mortgage to do so, will address the issue sufficiently.
“We believe there needs to be an adjustment of the Central Bank mortgage rules, particularly for those on average wages,” he continued.
Mr Davitt said the Central Bank mortgage rules are just too severe for this cohort of the population who cannot achieve the aspiration of owning a home, while public policy forces them to pay substantially more in rent.
He called on the Government to set up, without delay, the promised Commission on Housing.
“It is critical that this body would have input from all stakeholders, so that past mistakes can be avoided and the major impediments that remain to building sufficient homes are addressed,” he concluded.