Friday 30 September 2016

Homes plan has little to ease the plight of hard-hit millennials

Published 21/07/2016 | 02:30

'It is a shame that the Government's much-heralded housing strategy offers little in terms of firm plans to deal with the difficulties faced by younger people' (stock photo)
'It is a shame that the Government's much-heralded housing strategy offers little in terms of firm plans to deal with the difficulties faced by younger people' (stock photo)

It is not easy for young adults in this country. A study from the Economic and Social Research Institute (ESRI) last week found that younger people are having a tougher time of it in modern Ireland than older people.

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Housing and money problems were the big issues affecting this group, often dubbed millennials - those under the age of 30.

Click here to view full-size graphic
Click here to view full-size graphic

So it is a shame that the Government's much-heralded housing strategy offers little in terms of firm plans to deal with the difficulties faced by younger people.

High rents and difficulties for first-time buyers getting the funds together for a deposit are key issues affecting the millennials.

But 'Rebuilding Ireland' is very light when it comes to details for easing the impact of these two issues. Instead, there is a commitment to come up with solutions to the rental crisis and vague suggestions that the Budget will contain some form of help-to-buy scheme for first-time buyers.

This means that, for now, millennials have been left with very little, when they most need help.

The ESRI report last week confirmed what we instinctively know - young people continue to be the big losers since the financial collapse in 2008.

The study found that those aged between 18 and 30 are almost twice as likely as those aged over 65 to experience quality-of-life issues.

Eleven separate indicators were measured.

Millennials scored badly when it comes to income poverty, housing quality issues and the ability to afford basic goods.

The rental crisis is disproportionately hitting younger people.

High rents are inter-related to difficulties securing a mortgage, because paying through the nose for a rental property affects the ability of younger people to put together a deposit for a mortgage.

Central Bank lending rules have seen the size of the average deposit climb to €50,000 for first-time buyers in the Dublin area.

And the figures from the Irish Banking and Payments Federation show that a deposit of €20,000 was needed outside Dublin by the end of 2015, up from €16,000 in 2014.

This is in the context of a situation where young people are already under financial pressure because they earn less than older colleagues.

They are generally on contracts, rather than having permanent jobs, and few opportunities are open to them for advancement when they do get a job.

All of this means that the gaping holes in the 'Rebuilding Ireland' plan are an unforgivable let-down for young adults.

On rents, the plan says it aims to address obstacles stopping the delivery of more rental accommodation. But this appears to be the least developed of the sections in the 117-page report. A strategy for the rental sector will be published by the last three months of this year. So we get a report, telling us there will be another report.

Our tenancies legislation was designed for a society in which people rented temporarily before progressing to home ownership. It will take major cultural and legislative changes to alter this.

And the aspiration to own a home is embedded in the Irish psyche. People know instinctively that home ownership leads to the accumulation of wealth. But the housing plan is sparse when it comes to details of what form of financial help will be put in place to aid struggling millennials to get a foot in the door of a home they can call their own.

Again, we are told to wait. The Budget will contain a plan, we hear.

It is all very well to set out plans and strategies to build more houses. But young people can't get a mortgage, and instead are condemned to "rental jail" with spiralling rents and a chronic shortage of accommodation.

The rental crisis and the plight of first-time buyers must be dealt with urgently.

The new housing strategy misses this opportunity. It is far from being a game changer.

Irish Independent

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