'If I had bought the house only a year ago, I could have lost a lot of money'
Thursday March 29 2007
However, people who have bought homes in the past 12 months or so - particularly in commuter and "less desirable" areas - are facing the reality that they are unlikely to get the price they paid for their home if they were to sell today.
Sarah and her partner took out a 100pc mortgage, as the property needed to be completely gutted and the two spent six months working on it.
However, a year later, their relationship broke down and he moved out of the house.
"Even though both of our names were on the deeds, I ended up having to meet the mortgage repayments myself," said the 29-year-old.
Working as a teacher, she was just about able to meet the repayments. But when the interest rates first began to rise in December 2005, she made the choice to take in a lodger.
"I didn't really want to live with someone else. But I didn't really have a choice because when the rates kept going up there was no way I could afford it."
Despite the property being just two miles from Dublin city centre, she had difficulty getting a long-term lodger.
"It was a constant worry because I didn't know what was going to happen month to month. I was on a tracker mortgage, so I used to follow the ECB announcements religiously to see if they would be putting the rates up again or leaving them as they were." In the end, she made the decision to sell up.
"I was lucky because we had bought the house a couple of years ago and had the advantage of having some equity built up. But if we didn't have that head start and had only bought a year ago, I could have lost a lot of money."
She paid off the remainder of the mortgage and split the profits with her ex-partner. She is now renting again but doesn't regret her decision.
"I still want my own home. But at the moment I just can't afford it." Michael Culloty of the Money Advice and Budgeting Service (MABS) said although 70pc of people they deal with are on social welfare, a small but notable number of young workers are now seeking their help.
With the cost of living constantly on the up and wage inflation failing to keep pace, MABS is expecting the numbers coming for advice to continue to rise.
EDITORIAL COMMENT. P18
- Edel Kennedy
