Generation rent: 'I don't have the option to move back home to save'
Published 02/10/2016 | 02:30
Jo Linehan, 28, is co-founder of gaffinteriors.ie, a platform for people who are renting or buying
Situation: "I'm renting in Phibsborough, I have one flatmate who's been with me for five years as well. We're paying less than €1,500. It's not cheap but it's amazing for Dublin. It has gone up every year, incrementally.
"It was super hard to find somewhere. I was coming from Cork, so I didn't know even know anyone up here. I had such notions about living in Rathmines, and it was just so bananas, even back then. We're in a cottage in Phibsborough and we were so lucky to get it. Our landlord has been so, so good to us.
Pros: "It's very flexible. It's great to know if I did change my mind and I wanted to move, I could. I travel a lot with work; I was in New York last year for six months. It was no problem for me to go and sublet the room. So I suppose not having a mortgage and not having a tie is important. I would love to think about getting a mortgage but it's not even close to being an option. I can't actually imagine when it ever will be, I really don't know if I will ever own a house."
Cons: "The massive negative is that you're spending all this money each month, plus bills and everything else, and, I hate the term 'empty money' because it's not, but you kind of don't have anything to show for it. I mean that money goes every month and I don't ever see it again. And I suppose I'm at an age now, 28, where you are starting to think a little bit about mortgages and buying your own place.
"For someone like me, I don't have the option to move back home and save. And I suppose you are always a little bit worried that you are at the whim of a landlord, and a letting agent, especially as I do see the area improving so much. Which is great in some aspects, but we're really, really worried about the rent skyrocketing. And there's very little protection for that."
'I'm trapped because I'm in negative equity'
Joe Doyle, landlord and owner of insuranceworks.ie
Situation: "I have been a landlord for about 12 years now and have rented properties around west Dublin. I specialise in renting properties to people who are in receipt of social welfare payments, some sort of government-assisted payment. When I got into it in 2004, the prices were higher in terms of the purchase price of the property. But the rental values were similar. The major difference between now and then is that the taxation treatment of landlords' rental income is far more stringent now."
Pros: "Property, if you buy it correctly in the correct location and you have good mortgage terms with your lender, is an excellent investment for the long term, no matter what way you look at it.
"I run a company called insuranceworks.ie. That's a property repair company, so there is a bit of a crossover between the maintenance of my rental properties. If people are not in the area of dealing with properties or property maintenance to some degree, I don't think they should be near them.
Cons: "Landlords have no choice but to put the rent up, the reason being that on one side it looks like they're making money, but yet when they do their tax return at the end of the year, they're actually losing money. It's quite a unique system, where you can break even all year, and then still get a tax bill at the end of the year. A professional landlord will have that taken into consideration, to a certain degree. But an accidental landlord, or somebody who only has one or maybe two properties, will not be able to shoulder that burden, so they end up paying that out of their wages. That then results in more people wanting to get out of the property market and puts more pressure on an already stretched market.
"I'm kind of trapped in it because I'm in so much negative equity because I bought a lot of the properties at the height of the market. I don't have a way out, put it that way. But luckily enough for myself, I have sufficient amount of properties whereby if I make a profit on one I can use that to cover a loss on the other. It's very difficult to make a living. I have a job in addition to being a full-time landlord as well.
"The problem is not the properties, but the level of borrowings that most of the landlords will have against their properties. And then when you have interest rates going up, and taxation getting more severe, it squeezes people out of the market. We only have a certain amount of housing stock available now, and that's split between people that are going to live there as a home, and people that are going to rent there. It's going to take five years minimum to have any effect on the increase in the stock that's available, so the Government needs to do something to incentivise investment into the property market that will put more stock into the rental sector, as opposed to just the home owner sector.
"The uncertainty caused by the Government is a major con because we don't know what they're going to do. The property market is like a rising tide at the moment. And what's happening is, as the tide keeps rising, because people have resigned themselves that they're not going to make any money, when they get to the point where they can break even, they're just selling the property. That property then gets taken out of the rental market, and into the private housing stock. So the amount of rental property that's available year on year gets less and less. So some major incentive needs to be done to get people back into the industry."
'You're thinking that you could lose your house'
Jason Cooney, tenant on rent support and father of three
Situation: "I'm married with three kids, we have rent supplement. It's an ordinary three-bedroom house in Jobstown in Tallaght. My mother got ill, so I had to move home. And when we were looking to move back out again, it took a couple of months of just constant running around, trying to find somewhere. We're here three years now, but at the time it was extremely difficult to find somewhere. There were 30, 40 couples showing up at a viewing.
"They'd advertise it for say €1,100, and if somebody came and said, 'Well, I'll give you an extra €100,' they would go for it. It was more of an auction than just showing a house. Our rent is €1,200. I've just been moved over from rent allowance to the Housing Allowance Payment (HAP). It's so much better. The council pay the rent. It's more or less a long-term thing. There's a lot more structure to it, there's a lease."
Pros: "I can't see many of them and that's being honest. Especially being on social welfare, on rent allowance, there's not many pros. I suppose it is handy that I do still have my own home, my own space with my kids. I don't have to live with my parents. That's one of the major things for me. But there are a lot of negatives."
Cons: "The uncertainty. I'm lucky enough, I've got a brilliant landlord. But there are a lot of people out there where if the rent goes up, you literally don't know where you're going, and it's very, very scary. I don't know, I think the Government should move the rent caps. It should be done across the board.
"A lot of landlords just won't accept rent allowance anyway. There's a stigma attached to it. It's extremely difficult to get rent allowance. There's a lot of paperwork, a lot of running around. It's not even so much getting rent allowance, it's that now all the rents are up for review with landlords. My own rent was put up six months ago, we had to apply to the social welfare, they refused us, and then we had to go into Threshold (The National Housing Charity) in town for them to approve it. Once they approved it, it was okay for Social Welfare. It was stressful, you're thinking you could lose your house, be on the street with three kids."