Tuesday 6 June 2017

REA Rental Report (Dublin)

95% of renters in the Dublin area aspire to own their own home, a survey of over 300 tenants in the capital has revealed.

However, 37% of the 300 respondents do not see their ambition being achieved within the next five years, according to the survey carried out by Real Estate Alliance for the Irish Independent.

Only 15% of renters in the capital are actively planning a property purchase in the next year with a further 18% stating that they envisage buying within two years.

48% of tenants cite a lack of funds for a deposit as the main reason why they cannot buy a home, with 29% identifying low earnings as the prime reason.

34% of renters say that the most important factor preventing home purchase is a combination of deposit restrictions, lack of earnings and negative equity.

The attraction of a rent to buy scheme to aid house purchasing was brought into sharp focus when an overwhelming 81% of respondents said they would move into their ideal home today, within a commutable distance of Dublin, if they could rent it for a few years before buying.

Rental certainty over a five-year period was the most important factor in making such a scheme work, with 81% of people being prepared to pay a deposit to secure the right to buy after five years.

However, only 32% of current renters said that they could afford a deposit of over €5,000 for such a purpose.

“This survey is a resounding statement that long-term rental is not what people want,” said REA spokesperson Healy Hynes.

"Much has been made in the population figures of a shift from home ownership to rental. However, this is a response to the housing supply issue rather than a lifestyle decision.

“Despite a demographic change towards families renting, it is clear that it is not their desired long-term solution.

“The fact that 37% of renters feel that they will not own a home within five years shows how the odds are stacked against them in the current climate where it is cheaper to pay a mortgage than to rent.

“A person looking to buy a house at €250,000 must raise a deposit of at least €25,000, leaving them with a mortgage of €225,000, at average monthly repayments of €1,000.

"This repayment is about €500 cheaper than the average rent being paid by our respondents, meaning that they could save €6,000 per year by purchasing a house.

“However, the survey shows that the average renter can only raise a €5,000 deposit at most, and has few options left to raise the lump sum required or meet the income level requirements under current legislation.

“The survey also clearly shows an appetite for rent-to-buy schemes which would help to ease the path into home ownership.”

Renting is increasingly the choice of couples with 57% of all renters in the capital either married (14%) or living with a partner (43%), with 43% single and 22% of renters having children.

The survey showed the majority of respondents living in South Dublin (35%) and the city centre (29%), indicating that people may be renting where they want to eventually live, but are hamstrung by house prices and lending restrictions.

52% of Dublin renters are paying over €1,300 per month for their property, with 27% in the band between €1,300 and €1,500 and a further 14% paying between €1,500 and €1,750.

Over two thirds of Dublin rental households earn more than €40,000 with over a third (36%) earning over €60,000 - an income that would previously have gained the holder entrance into the housing market at some level.

Transport, amenities, parking, security and securing a new property all figured low on the priorities of Dublin’s renters, with location (43%) and price (40%) being the main drivers when choosing a property to rent.

91% of the respondents are between the ages of 25-44, with just 4% of renters under 25.

Tenants rate the ability to move again if their circumstances change and the fact that they are not responsible for maintenance as the two greatest attractions about renting.

However, one third (33%) feel that rent is wasted money with 32% feeling that they are missing out on owning their own home as property prices keep rising.