Monday 23 October 2017

Key issues facing the housing market

There are a number of key issues facing the housing market
There are a number of key issues facing the housing market
Paul Melia

Paul Melia

Certainty around rents - A shortage of rental properties means landlords can effectively name their price. Linking rents with inflation is one possible solution.

Security of tenure - Experts suggest indefinite leases, coupled with rent certainty, could help encourage people to view renting as a long-term solution to their housing needs, and not just a stopgap.

Shortage of professional landlords - The tax system is less favourable to residential landlords than those in the commercial sector. Changing the system could encourage institutional investors seeking a return over 20 to 30 years.

Land - There is no shortage of land, but many sites were bought for inflated prices and carry hefty debts. Debt could be written down to encourage development.

Building costs - NAMA says it costs up to €165,000 to build a three-bedroom semi-detached home in a Dublin suburb, excluding development levies, land costs, services, such as water and power, and other issues, including financing. The Housing Agency is currently examining this issue.

Lack of equity - Few developers have the necessary funds to invest in projects. Banks will no longer lend 100pc of development costs, meaning projects are not going ahead.

The regulatory system is fragmented - There are too many agencies responsible for the housing sector. A national housing authority is one possible solution.

Lack of building by local authorities - Councils delivered up to 7,000 social housing units a year, but have effectively left the market. The Government wants 75,000 homes by 2020 through a combination of new build and leasing, but the key question is who is going to drive the programme?

Irish Independent

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